What to Look For in Upcoming Earnings Reports

Social Security and Taxes | Fight Inflation with Series I BondsFight Inflation with Series I Bonds | Created for {EMAIL} | [Web Version]( July 15, 2022 CONNECT WITH KIPLINGER  [LinkedIn]( [Facebook]( [Twitter]( [Instagram ]( [Youtube]( [SIGN UP]( ⋅ [WEBSITE]( [] What's in the Works [] The second-quarter earnings season is kicking into high gear, with several big banks such as JPMorgan Chase ([JPM]() and Wells Fargo ([WFC]() already reporting. Next week, Wall Street will start to hear from other sectors, including [communication services](, which, alongside [consumer discretionary](, have issued the largest declines in earnings estimates since the start of Q2 (-9.4% and -20.1%, respectively), according to Michael Reinking, senior market strategist for the New York Stock Exchange. Reinking says many of the same themes that have been with us in recent quarters remain. Among the important themes to watch are profit margins – which will show how well price increases are being tolerated and whether they’re impacting demand – and supply chain/logistics, specifically if recent declines in shipping and freight rates are helping bring down costs for companies. Reinking also points to the strength of the U.S. dollar as an area of interest for multinational firms. “There were a handful of large companies that have highlighted this headwind over the last few months, but it doesn’t seem like this has fully been flushed out of estimates yet,” he says. “Up until this point, the Street has been forgiving of currency related misses.” [Double Your Miles In Your First Year With This Card]( This first class card offers you no-annual fee, flexible rewards and unlimited match of all the miles you've earned at the end of your first year. [Learn more]( ADVERTISEMENT: [] Continued [] Investors should also note that consumers are cutting back on some spending in response to higher prices. Retail sales rose a strong 1.0% in June, but most of the increase was the result of higher prices. After adjusting for inflation, sales were down slightly. While e-commerce sales bounced back in June, consumers have reacted to higher prices for gasoline, food, clothing and other items by cutting back on purchases. As inflation soars, more Social Security benefits will be subject to federal income tax. Unlike many federal tax items, the income thresholds at which Social Security benefits start getting taxed aren’t adjusted for inflation each year. For decades, these income levels have stayed static at $25,000 for single filers and $32,000 for joint filers, despite the fact that Social Security benefits have gone up and people have more income than they did in the past. As a result, more cumulative Social Security benefits will be taxed this year than in 2021. A proposal by House Democrats to increase the $25,000 and $32,000 thresholds to $35,000 and $50,000 is a no-go with Republicans. That’s because the bill includes a tax hike for upper-income individuals. It would have the 6.2% Social Security tax for employers and employees kick in again for workers with wages over $400,000. For 2022, that tax now ends once wages hit $147,000. Free download, [The Kiplinger Letter's Forecast](. No information required from you. [Insanely High Paying Cash Back Cards With No Annual Fee]( New card owners can receive a $200 bonus offer, high ongoing cash back rates, no annual fee, or 0% interest until 2023. [READ MORE]( ADVERTISEMENT [] Also on Kiplinger [] - [Fight Inflation with Series I Bonds]( - [21 Best and Worst Things to Buy at Aldi]( - [3 Investing Truths to Live By (Right Now and Always)]( - [Should You Ask for a Raise? 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