Five world markets themes next week

LONDON (Reuters) - Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.

1. RESULTS RUSH

The early wave of Q2 earnings this week has prevented any major risk shakeout but there are plenty more results next week, including from banking, technology (Apple, Microsoft), and other sectors (Lockheed Martin, Coke, McDonalds). Investors heading into next week with bullish inclinations will be looking for the VIX to stay subdued after falling to lows last seen in September 2008, especially if more pent up cash is to be released from money market funds. Bears will be thinking that what might be the S&P's best weekly performance since mid-March could be setting the market up to be more sensitive to bad news.

2. BANKS - IS THE BEST PAST?

It is hard to see how bank results next week can top the boost which Goldman and JPM gave stocks this week. More of a mixed bag is likely with the U.S. slate including Bank of New York Mellon, Morgan Stanley, Wells Fargo, Capital One, and American Express while Credit Suisse will be the first major European bank to report. Defaults and delinquencies will be in focus for banks more exposed to the retail sector -- both for what it means for their outlook and for what it bodes for household solvency and spending.

3. DRILLING DOWN

The breakdown of company results next week (ABB, Texas Instruments, Caterpillar, DuPont, Boeing, 3M) will show the extent to which the inventory rebuilding story, which has helped lift world equities almost 40 percent from their March lows, can offer more sustainable support to stocks in the weeks and months ahead. Earnings next week will be closely scanned to see how inventories are stacking up verus orders. How deeply firms are cutting into costs to defend profit margins, as well as their business investment plans, will be key for unemployment and other macroeconomic data.

4. FLASH IN THE PAN?

Flash PMIs will show whether the positive surprise of the German orders and output data was a flash in the pan for the euro zone, and whether Chinese growth is generating orders in key euro zone countries. British Q2 GDP -- the first out of any G7 country -- will show the relative strengths and weaknesses of domestic demand, exports and inventory components and it will be particularly interesting in the UK's case to see just how supportive sterling's past slide has proved for net trade.

5. QE STEER

Minutes from the Bank of England's last policy meeting and Congressional testimony from Federal Reserve Chairman Ben Bernanke should give a clearer steer on where quantitative easing programs are heading. Key questions investors want answered are why the BoE deferred making a firm decision on whether to extend QE beyond August, and whether the Fed will increase its bond purchases. Government bond markets will be particularly sensitive and signs that central bank appetite for buying government debt is cooling -- perhaps because of concern over long-term inflation -- could trigger heavy selling, particularly in an climate of strong U.S. bank earnings and rebounding equities.

(Compiled by Swaha Pattanaik; Editing by Toby Chopra)

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