Stocks have some momentum heading into the second trading week of July. Both the Dow Jones Industrial Average (^DJI -1.24%) and the S&P 500 (^GSPC -1.46%) rose by roughly 1% last week and are near all-time highs. Fears about new COVID-19 variants were pushed aside for hopes of continued strong consumer spending.  

Earnings season brings a few major operating updates that will answer questions about the health of the consumer right now. Let's look at a few metrics to follow when PepsiCo (PEP -0.15%), Delta Airlines (DAL -1.62%), and Bank of America (BAC -1.54%) announce their results this week. 

Woman drinking soda.

Image source: Getty Images.

PepsiCo's cash returns

Tuesday morning's highlight will be the second-quarter update from global snack food and beverage giant PepsiCo. The owner of dozens of valuable brands, from Gatorade to Quaker Oats, used its wide portfolio to keep growth rocking during the pandemic even as rival Coca-Cola (KO -1.30%) shrank. But investors are bracing for some rocky reports after sales gains slowed to just 2% last quarter compared to 6% in the previous quarter.

CEO Ramon Laguarta and his team are also spending more cash on the business lately, in a strategy they say is positioning Pepsi to become more of a growth company. Falling profit margins are another reason why the stock hasn't participated in the wider boom since early 2020.

Yet PepsiCo can turn that performance around by improving on the roughly 5% annual sales increase investors have seen since 2019 with help from energy drinks and a bigger food portfolio. That success, plus its entry into the Dividend Kings club in 2021, should deliver strong returns for investors.

Delta Airlines' summer forecast

The pandemic created a wild ride for Delta Airlines shareholders since early 2020, but shares are up heading into this Wednesday's earnings update. The airline is expected to announce big steps back toward sales growth and profitability as travel picks up around the world. Executives raised their Q2 outlook in early June and hinted that Delta might reach operating profitability heading into the second half of the year.

There's no shortage of worries that investors will be watching in this report, including fuel prices, aircraft capacity, and fleet maintenance and upgrade costs. These challenges might complicate its growth strategy, but Delta is aiming to make a full rebound by 2023. The airline stock will need to show encouraging progress along that path on Wednesday to keep its recent rally going.

Bank of America's economic update

Bank of America investors have a lot to look forward to in Wednesday's upcoming earnings announcement. Economic growth has picked up in recent months, and that boost is contributing to a big rally in bank stocks.

This week's report might feature some of the most bullish comments that investors have heard in years from Bank of America CEO Brian Moynihan. Management talked up record deposit levels and swelling investment portfolios in mid-April. Those trends likely accelerated over the following months.

Investors this week will be watching for continued improvements in key financial metrics, including deposit levels, credit losses, and overall asset efficiency. Gains in these areas should allow Bank of America to grow earnings despite historically low interest rates. Yet the stock's path on Wednesday and beyond will depend mainly on management's reading on the durability of the consumer spending rebound through 2021 and beyond.