What to watch

Earnings to shift storyline away from Greece

The U.S. corporate earnings story could start to steal headlines from the Greek debt crisis multi-act drama. What looks like close to a sealed deal between Greece and its creditors could help divert investors’ focus back to business fundamentals.

Wall Street’s focus on macro issues like the Greek bailout negotiations and mainland China’s stock market hitting bear-market territory could give way to more micro matters, such as what type of earnings reports do banking giants JP Morgan Chase or Wells Fargo deliver when they report second-quarter results Tuesday.

Wall Street has been focused almost exclusively on foreign events in recent weeks, but that is likely to change as the quarterly profit-reporting season kicks in. This week, 38 companies in the Standard & Poor’s 500-stock index and six Dow Jones industrial average components will report, according to Thomson Reuters.

The profit growth outlook isn’t super robust, however. Analysts polled by Thomson Reuters now forecast an earnings contraction of 2.9% vs. the same quarter a year ago. And while fear of a socalled profit recession will make headlines again, the same script occurred at the start of the first quarter of the year, but profits ended up growing 2.2% in the first three months of 2015.

The big drivers will be financial companies, which are expected to grow profits at a nearly 15% clip, driven by diversified banks, which are forecast to grow earnings 41%, Thomson Reuters says. The big laggard: the energy sector.