Bank earnings and inflation reports put the economy back in focus

Markets enter the week with bank earnings, Johnson & Johnson results and two inflation reports lined up, giving investors a fast check on the U.S. economy. For everyday investors, the main issue is whether companies and consumers still look healthy while inflation shapes the Federal Reserve’s next rate decisions.

CNBC reported that Tuesday is the packed day: JPMorgan, Bank of America, Citigroup, Wells Fargo and Goldman Sachs are scheduled to report second-quarter results as June consumer price index data arrives at 8:30 a.m. ET. The consumer price index, or CPI, tracks what households pay for goods and services, making it one of the market’s most watched inflation gauges.

Bank calls will test the economy story

Large banks matter beyond their own earnings because they see spending, lending, deposits, mergers and capital raising across large parts of the economy. CNBC said Goldman Sachs’ call is scheduled for 9:30 a.m. ET Tuesday, while Wells Fargo’s call is set for 10 a.m. ET. JPMorgan’s call, led by CEO Jamie Dimon, is scheduled for the same time as the CPI release.

For Wells Fargo, CNBC said investors are watching whether the bank can recover from two disappointing quarters. Wall Street expects $21.8 billion in revenue and earnings of $1.72 per share, according to figures cited by CNBC. The focus includes return on tangible common equity, or ROTCE, a banking measure that shows how well a firm turns shareholder capital into profit. CNBC said the target range investors are tracking is a sustainable 17% to 18%.

Wells Fargo’s efficiency ratio, which compares operating expenses with net revenue, is also in focus after moving in the wrong direction over the past two quarters, CNBC reported.

Goldman Sachs is expected to report $16.1 billion in revenue and earnings of $14.39 per share, according to CNBC. The bank’s investment banking results will include the second-quarter SpaceX initial public offering, which CNBC described as record-breaking and led by Goldman. An initial public offering, or IPO, is when a company sells shares to public investors for the first time.

CNBC said investors will also listen for comments from Wells Fargo and Goldman on artificial intelligence: measurable productivity gains, spending levels and whether companies are trying to reduce computing costs after a more open-ended spending phase known as tokenmaxxing.

Johnson & Johnson gets its own test

Johnson & Johnson reports Wednesday morning after a rally that has taken the stock near all-time highs, according to CNBC. The report gives the company a chance to show whether its recent strength reflects business performance as well as a broader shift into health-care stocks.

Wall Street expects Johnson & Johnson to post $25.05 billion in revenue and earnings of $2.85 per share, CNBC reported. Investors are watching blood-cancer drug Darzalex, autoimmune treatment Tremfya and Icotyde, a daily psoriasis pill approved by U.S. regulators in March.

Goldman Sachs analysts told clients last week that they do not expect Johnson & Johnson to disclose Icotyde revenue, CNBC reported, because the company usually does not break out sales for early launches. Instead, prescription trends and patient types are expected to draw attention.

In medical devices, CNBC said investors are watching cardiovascular products from Shockwave, which Johnson & Johnson acquired in 2024, and Impella heart pumps. CNBC reported that Johnson & Johnson’s pharmaceutical business generated $15.4 billion in sales last quarter with 7.4% organic growth, while medical devices produced $8.6 billion with 4.6% organic growth.

Inflation data will feed the Fed debate

FactSet economists expected June CPI to rise 3.8% from a year earlier and fall 0.2% from May, CNBC reported Friday. That would follow a 4.2% annual increase in May. The producer price index, or PPI, is due Wednesday and measures prices received by producers. FactSet expected PPI to rise 6.2% annually and decline 0.2% month over month.

Oil is part of the inflation story. CNBC reported that WTI crude fell from the low $90s per barrel in early June to just below $70 by month-end after an interim peace agreement between the U.S. and Iran led to a partial reopening of the Strait of Hormuz. CNBC also reported that renewed tensions slowed tanker traffic through Hormuz last week, with missiles and drones continuing over the weekend.

Other data on deck include June retail sales, Friday housing starts, and the Federal Reserve’s industrial production and capacity utilization report, according to CNBC. Earnings from J.B. Hunt, Netflix and United Airlines are also set to add more detail on shipping, media demand and travel spending.

This story draws on original reporting from CNBC Markets.