*

JPMorgan ( JPM ), Goldman among bank reports due in coming week

*

S&P 500 earnings expected to rise nearly 9% in Q3

*

Stocks near record highs as bull market turns three

By Lewis Krauskopf

NEW YORK, Oct 10 (Reuters) - Investors will look to

major banks' quarterly earnings reports in the coming week to

help gauge the U.S. economy's health as the federal government

shutdown has interrupted the flow of new data.

Despite an up-and-down week, the S&P 500 remained near

record highs. The benchmark stock index has gained more than 14%

this year and is set to mark the third anniversary of its

current bull market run on Sunday.

With the U.S. stock market's valuation around its highest

level in five years and some concerns about over-inflated

investor enthusiasm for technology and artificial intelligence,

a strong third-quarter earnings season will be critical for

equities to maintain their momentum.

"The market just keeps grinding higher," said Garrett

Melson, portfolio strategist at Natixis Investment Managers

Solutions. "The key underpinning of that is stronger earnings

outlooks. ... When you look at the fundamentals, things continue

to look good."

The record-breaking run for U.S. stock indexes has been

accompanied by recent sharp gains for other assets, including

gold, silver and bitcoin. Several high-profile officials have

recently made cautious comments about markets, including

Kristalina Georgieva, head of the International Monetary Fund,

and JPMorgan ( JPM ) CEO Jamie Dimon.

JPMorgan ( JPM ) is among the major banks kicking off the

earnings season when it reports on Tuesday, along with Goldman

Sachs ( GS ), Wells Fargo ( WFC ) and Citigroup ( C/PN ). Bank of

America ( BAC ) and Morgan Stanley ( MS ) are due on Wednesday.

Recent weak labor market data has raised concerns about

growth and prompted the Federal Reserve to restart interest rate

cuts.

"Banks are a window into the U.S. economy," said Irene

Tunkel, chief U.S. equity strategist at BCA Research. "If we see

that consumers are still spending, if we see that demand for

loans is improving, then I will start to think that perhaps

we're not really edging towards contraction."

Other companies due to report next week include healthcare

company Johnson & Johnson ( JNJ ) and asset manager BlackRock ( BLK )

. S&P 500 companies overall are expected to have

increased earnings by 8.8% in the third quarter from a year

earlier, according to LSEG IBES.

"A lot of the bullishness is built around the expected

earnings growth," said Chuck Carlson, chief executive officer at

Horizon Investment Services. "If we start to see cracks in that,

that would not be good for the market in general."

Attention also will be on Washington to see if Republican and

Democratic lawmakers break an impasse and end a government

shutdown that began on October 1. Markets have largely shrugged

off the shutdown so far but investors have warned that risks to

the economy will increase the longer it goes on, while it is

already hamstringing U.S. travel.

Another issue for investors is the interrupted publication of

key economic reports by government agencies. The monthly

employment report, due on October 3, already has been delayed.

Reports on consumer and producer prices, watched closely to

assess inflation trends, have been scheduled for Wednesday and

Thursday, respectively, with the monthly retail sales report due

on Thursday.

Investors have concerned that the shutdown could affect next

week's releases as well. The New York Times and Bloomberg

reported

on Thursday that the U.S. Bureau of Labor Statistics is

bringing some furloughed workers back to get out the monthly

consumer price index report, and the Times reported it was

likely to be released in time for the Federal Reserve's next

meeting on October 28-29.

The data flow is being interrupted at a particularly

unfortunate time, said David Kelly, chief global strategist at

J.P. Morgan Asset Management.

"There are major questions, right now, about how the immigration

crackdown is impacting jobs and how tariffs are impacting

inflation," he wrote in a note on Monday.

"The longer the shutdown continues, the harder it will be to

track the direction of the economy."​