Equity markets rebounded for another day on Thursday as traders gear up for the Q2 earnings reporting season. The peak of the season begins next week with reports from the big banks and the news is expected to be dismal. At best, the banks will report tepid growth with a high likelihood of earnings contraction. The contraction will be due in large part to increased credit reserves in the face of an oncoming recession, the question is how big will the build-up be?

Friday action will be dominated by the NFP report which is expected to show a slowdown in job gains. The question here regards wages and how fast earnings are growing? While good for the average new job taker the persistent increase in labor costs is bad news for businesses and consumers. Next week, investors will have a wave of economic data to wade through including the CPI for June and Retail Sales.