{"id":433524,"date":"2026-07-11T01:48:15","date_gmt":"2026-07-10T18:48:15","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-earnings-bar-is-high-and-wall-street-thinks-it-gets-cleared-anyway-a-look-at-the-week-ahead-433524\/"},"modified":"2026-07-11T01:48:15","modified_gmt":"2026-07-10T18:48:15","slug":"the-earnings-bar-is-high-and-wall-street-thinks-it-gets-cleared-anyway-a-look-at-the-week-ahead","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-earnings-bar-is-high-and-wall-street-thinks-it-gets-cleared-anyway-a-look-at-the-week-ahead-433524\/","title":{"rendered":"The earnings bar is high and Wall Street thinks it gets cleared anyway \u2014 a look at the week ahead"},"content":{"rendered":"
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Earnings season starts in earnest next week and the stakes couldn’t be higher. The S&P 500 is coming off a Q2 where the index averaged 7,499 \u2014 up nearly 15% from the Q1 average \u2014 while WTI averaged $92.99 on the Strait of Hormuz closure. That’s a combination that shouldn’t work, and yet here we are.<\/p>\n

Scotiabank’s portfolio strategy team put out their Q2 preview this week and the headline number is a big one: they see S&P 500 Q2 EPS at $81.21, a fresh record high and +23% y\/y. Strip out Technology and it’s still +11%, so this isn’t just an AI story \u2014 though it’s mostly an AI story. The tape has been telling us this for months but it’s worth repeating: Energy earnings are expected up 122% y\/y on the oil spike, Tech +61%, Materials +35%. Health Care is the lone loser, seen contracting 8.7%.<\/p>\n

The two things Scotia says to watch: (1) AI commentary \u2014 monetization, capex, and whether the bottleneck is shifting from chips to power infrastructure, and (2) margins. The Hormuz disruption means supply-chain pressure and higher energy costs, but Scotia doesn’t expect a material hit at the index level. Consensus has Q2 margins at 14.85%, a notch below Q1’s record 15.4%. If companies guide margins higher despite $90+ oil, the bears have a real problem.<\/p>\n

One more supportive stat before we get to the calendar: the US economic surprise index is at its highest level in about two years, earnings warnings are scarce, and 84% of the 21 early reporters have beaten. The bar is high, but everything points to it being cleared.<\/p>\n

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Here’s how the week sets up.<\/p>\n

Monday, July 13<\/p>\n

The calm before the storm. AeroGrow and FirstBank after the close. Nothing here notable.<\/p>\n

Tuesday, July 14 \u2014 Bank day<\/p>\n

The main event. Citigroup, Goldman Sachs, JPMorgan, Bank of America and Wells Fargo all report before the open. This is the traditional season opener and it matters more than usual this quarter for three reasons.<\/p>\n

First, trading revenue. The Hormuz closure produced the kind of volatility across energy, FX and rates that fixed-income desks dream about. If Goldman and JPMorgan don’t print blowout FICC numbers this quarter, they never will. Second, credit. The unemployment rate is steady at 4.3% and payrolls bounced back to +111K average in Q2, so provisions should stay tame \u2014 but listen for any cracks in commercial or consumer books with oil where it is. Third, the yield curve. The 10s\/3M spread steepened to +72 bps on average in Q2 from +53 bps in Q1. That’s NII fuel, and it’s why Scotia has Financials growing EPS +7.6% y\/y \u2014 middle of the pack, but solid off a strong base.<\/p>\n

Jamie Dimon’s economic commentary will get the headlines, as always. The more interesting tell will be whether the big banks echo the CFO confidence surveys, which Scotia notes are at one of the highest levels post-Covid despite elevated uncertainty.<\/p>\n

Also Tuesday morning: Fastenal, which is a better read on the industrial economy than half the Fed surveys, and Ericsson out of Europe.<\/p>\n

Wednesday, July 15 \u2014 Breadth check<\/p>\n

This is the day we find out how wide the earnings story really is.<\/p>\n

Before the open, ASML is the one to watch. Bookings are the whole game. With AI capex still ripping \u2014 Scotia’s charts show extended-tech forward capex going vertical \u2014 ASML’s order book is the single best forward indicator on whether the buildout has legs into 2027. Any wobble in the guidance the whole chipmaker sector could plummet.<\/p>\n

Morgan Stanley and BlackRock round out the financials picture. \u00a0Johnson & Johnson and Elevance carry the flag for Health Care, the only sector expected to post negative earnings growth this quarter (-8.7%). Elevance in particular \u2014 medical cost trend commentary has been the sector’s kryptonite for two years. Progressive, Conagra, PNC, M&T and Cintas fill out the morning. Cintas is quietly one of the best macro tells out there: uniform rentals track employment better than almost anything.<\/p>\n

After the close, United Airlines is the report I’ll be watching closest. Fuel is the story \u2014 jet fuel costs exploded with crude in Q2 and the question is how much pricing power the airlines have to pass it through. UAL’s commentary on demand durability and fuel recapture reads straight across to the whole global airline complex. If United says premium demand is holding and they’re recapturing fuel through fares, that’s the bullish template.<\/p>\n

\u201cAirfares are a function of supply and demand,\u201d Delta CEO Ed Bastian said on CNBC Friday. \u201cThe demand set is really strong.\u201d<\/p>\n

J.B. Hunt gives us the freight read the same evening \u2014 intermodal volumes will show whether the goods economy is participating and all indications are that there have been a genuine pick in H1.<\/p>\n

Thursday, July 16 \u2014 The heavyweight double-header<\/p>\n

Before the open, two giants: UnitedHealth and TSMC.<\/p>\n

UNH is the biggest wildcard of the week. The stock has been a disaster zone and expectations are in the basement.<\/p>\n

TSMC is the other half of the AI trade’s report card alongside ASML. Revenue already comes monthly so the numbers themselves rarely surprise; it’s the capex guide and the commentary on advanced-node capacity that move markets. If Scotia is right that the AI bottleneck is migrating from chips to power, TSMC’s tone on capacity additions is where you’ll hear it first.<\/p>\n

GE Aerospace and Abbott report the same morning \u2014 GE Aerospace has been one of the great post-breakup stories and the aftermarket engine business prints money when airlines fly this much. US Bancorp, State Street and Citizens extend the regional\/trust bank read, and Prologis gives us the industrial real estate pulse.<\/p>\n

After the close: Netflix, which has been a dog. The subscriber disclosure era is over, so it’s revenue, margins and the ad tier trajectory. Netflix has beaten expectations with numbing regularity\u00a0 but the multiples have compressed on fear that it’s a stale product with young people shifting to YouTube. Alcoa the same evening is a pure play on the commodity reflation theme and tariffs.\u00a0<\/p>\n

Friday, July 17 \u2014 Regionals and the European industrial read<\/p>\n

The regional banks close out the week: Regions, Truist, Fifth Third. This is where we learn whether the NII story extends down the size spectrum or whether deposit competition is eating the curve steepening. Travelers gives us the insurance read \u2014 pricing has been firm for years and catastrophe losses are always the swing factor.<\/p>\n

The sleeper story Friday is the European industrial complex: Volvo, Sandvik, SKF, Autoliv and Assa Abloy all report. Together they’re a comprehensive read on global industrial production, mining capex and auto builds. <\/p>\n

The bottom line<\/p>\n

The setup is unusual: record earnings expectations, record index levels, $90+ oil, and a geopolitical premium baked into everything. Normally that’s a recipe for disappointment. But the revisions have been going the right way since the Iran war started \u2014 Energy estimates have been marked up 50% and even the broad index has been revised higher, which almost never happens into a reporting season.<\/p>\n

Earnings growth has historically been accompanied by strong equity returns, and consensus now has 2026 EPS at $340 (+25%) and 2027 at $396 (+17%). Those numbers only survive if this week’s reporters \u2014 the banks on credit, ASML and TSMC on AI capex, United on fuel pass-through \u2014 say the quiet part out loud: that the economy absorbed a supply shock and kept growing. If so, we could see another leg higher in stock markets this year.<\/p>\n

This article was written by flc97fe4880a4b454993821fe0b770a597 at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Earnings season starts in earnest next week and the stakes couldn’t be higher. The S&P 500 is coming off a Q2 where the index averaged 7,499 \u2014 up nearly 15% from the…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-433524","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/433524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=433524"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/433524\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=433524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=433524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=433524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}