The second quarter US earnings season kicks off today (14 July) with banks JPMorgan (JPM:NYSE) and Morgan Stanley (MS:NYSE) reporting before the market open.

This quarter takes on more significance than usual because of increasing concerns that rising interest rates and higher inflation caused by the war in Ukraine will tip the economy into recession.

While share prices have dropped meaningfully year-to-date, with the S&P 500 index down around a fifth and the technology-driven Nasdaq 100 down around a third, earnings expectations have remained firm.

Some strategists argue this doesn’t tally with the Federal Reserve’s desire to slow growth and bring down inflation.

One sector where analysts have recently taken a knife to forecasts is the banking sector, which may surprise some investors.

A flat yield curve makes it difficult for the banks to earn a positive interest rate spread while fewer initial public offerings and mergers and acquisitions have reduced fee income on corporate deals.

Analysts expect second quarter earnings for the banking sector to drop around 25% year-on-year according to Bloomberg-complied estimates. Banking shares are down around a third so far this year.

Lockdown favourite turned pariah, Netflix (NFLX:NASDAQ) reports on 19 July. Given the stock is down 74% since November 2021, the earnings bar is arguably set very low.

Since Covid-19 restrictions were lifted consumers have been more interested in spending on experiences rather than binge watching at home, resulting in disappointing subscriber figures for Netflix.

US broker Piper Sandler believes the number of hours spent watching the top 10 movies or shows on Netflix fell 4% in the latest quarter, suggesting subscriber growth will remain subdued when it next reports.

Electric car maker Tesla (TSLA:NASDAQ) reports after the market close on 20 July and investors will be hoping for a brighter production outlook.

Tesla has already reported disappointing second quarter deliveries, down 18% on the prior quarter and the first fall in two years.

The company blamed supply chain issues at its Texan and German facilities and Chinese health restrictions on the drop.

Rising interest rates have had a dramatic impact on US mortgages with fixed-rate 30-year mortgage costs doubling to 5.7%. Investors will get a clearer picture of the impact on demand when housebuilder D.R. Horton (DHI:NYSE) reports on 21 July.

Year-to-date the shares have shed a third of their value, but 2022 earnings estimates have increased by around a fifth.

Another barometer of consumer strength is likely to be revealed when credit card provider American Express (AXP:NYSE) reports on 22 July.

In mid-June the company said the proportion of bad debts remained steady at 0.7% for the second consecutive month.

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