US Earnings Preview Summary

Date: 14 July 2025

Author: Kathleen Brooks, Research Director UK

Market Overview

Global stocks have started the week on a muted note, with both European and US markets showing declines. However, the FTSE 100 is an exception, inching closer to record highs from the previous week.

Key Developments

• AstraZeneca: The company has seen significant gains following positive results from a late-stage trial of its hypertension drug, Baxdrostat, which could potentially generate $5 billion in annual sales.
• US Crypto Market: The cryptocurrency market is experiencing a surge, with Bitcoin reaching a record high above $121,000. This rally is fueled by upcoming legislative discussions in the US House of Representatives regarding key crypto industry regulations.

Earnings Season Insights

This week marks a critical period for US equities as earnings season kicks into high gear. Major banks, including JP Morgan and Goldman Sachs, are set to report their Q2 results, with Netflix also scheduled to release its earnings on Thursday.

Analysts have adopted a bearish outlook, citing concerns over a weakening economy and tariff impacts, leading to a reduction in earnings expectations across most sectors of the S&P 500. Notably, the energy sector has faced the most significant cuts, while the communications sector has maintained stable forecasts.

Company Optimism vs. Analyst Pessimism

Despite the bearish sentiment from analysts, many companies are expressing optimism about their Q2 performance. Out of 110 S&P 500 companies that have provided earnings guidance, 59 have issued positive EPS forecasts, surpassing the five-year average. The tech sector leads this positive sentiment, although it also has the highest number of companies issuing negative guidance.

Focus on the Banking Sector

The banking sector is under scrutiny as major banks report their earnings. While trading revenues may see a boost from market volatility, loan loss provisions will be closely monitored to gauge the health of the consumer and the broader economy.

JP Morgan, as the largest US bank, is expected to increase its net interest income target, benefiting from high interest rates. Conversely, Bank of America may struggle due to high deposit rates, with overall revenue anticipated to decline.

Netflix Earnings Preview

Netflix is expected to report revenues of $11.04 billion for Q2, an increase from $10.54 billion in Q1. Analysts are particularly interested in whether this growth stems from advertising revenue or subscriber growth, although Netflix no longer discloses subscriber numbers. The stock is currently trading at a high valuation, and its performance post-earnings will be closely watched.

Conclusion

This earnings season is pivotal for the banking sector and tech companies, with potential implications for market trends moving forward. Investors will be keenly observing the results and guidance provided by these major players.