The Week Ahead (GS, JNJ, TSM, and NFLX Earnings; Canada Inflation Report and Housing Starts)

Ahead of the event, analysts expect Johnson & Johnson to report a profit of $2.73 per share, down 2.5% from $2.80 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street's EPS estimates over the past four quarters.

Its adjusted EPS for the last reported quarter increased 12.4% year over year to $2.71 per share, beating the consensus estimate by 2.7%, as sales in its medical devices business surged.

Looking ahead to fiscal 2024, analysts expect Johnson & Johnson to report an EPS of $10.62, up 7.1% from $9.92 in fiscal 2023. Its fiscal 2025 EPS is expected to grow 2.7% annually to $10.91.

Revenue in the April-June period of this year came in at T$673.51 billion ($20.67 billion), according to Reuters, compared with an LSEG SmartEstimate, drawn from 21 analysts, of T$654.27 billion. That represents growth of 32% on-year, compared with $15.68 billion in the year-ago period.

On its most recent earnings call in April, Taiwan Semiconductor Manufacturing Co forecast second quarter revenue in a range of between $19.6 billion to $20.4 billion. For June alone, TSMC reported that revenue rose 33% year-on-year to T$207.87 billion.

Netflix expects its revenue to increase 16% year-over-year (YoY) to $9.49 billion in the second quarter of 2024 but analysts predict Netflix's Q2 revenue will be slightly higher at $9.53 billion. In the first quarter of 2024, Netflix's revenue was $9.37 billion, up 15% from the prior year.

Regarding earnings, Netflix forecasts net income of $2.06 billion, or $4.68 per share, for the second quarter of 2024 whereas analysts estimate Netflix's Q2 earnings per share will reach $4.74. For comparison, in Q2 2023, Netflix reported net income of $1.48 billion, or $3.29 per share. Netflix's net income in Q1 2024 was $2.3 billion, or $5.28 per share.

The Bank of Canada’s quarterly Business Outlook Survey (BOS) and June’s inflation data will be the last major data releases before the BoC’s next interest rate announcement on July 24. Analysts expect a slowdown in inflation after an upside surprise in May and for the BOS to look soft enough to justify a second consecutive 25 basis point interest rate cut from the BoC at that meeting.

Headline consumer price index growth is expected to slow to 2.7% year-over-year after a surprisingly higher 2.9% reading in May. Energy price growth slowed on lower gasoline prices in June and food price increases have also been edging lower. Stripping out volatile food and energy components, inflation should come in at 3%, little changed from the prior month. But, the BoC will focus on growth in the preferred “core” measures, which provide more insights into broader underlying price growth trends. The closely watched three-month average of monthly increases will likely tick higher for both the median and trim CPI measures as a very small monthly increase in March falls out of that calculation, but the six-month average should hold around the 2% inflation target given earlier downside surprises.