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Health care earnings season starts in earnest this week. Photo: Drew Angerer/Getty Images

Johnson & Johnson today kicks off second-quarter earnings for a health care industry that has been fighting Wall Street jitters despite record-level profits.

The big picture: Wall Street has low expectations for all of corporate America in Q2, but health care may be different. A lot of the industry isn't affected by the Trump administration's trade war with China, and all available data suggests health care spending is not meaningfully slowing down.

Driving the news: Johnson & Johnson faces unique situations, like Oklahoma's demand that the company pay $17.5 billion to settle its opioid case and a possible criminal probe into its baby powder.

  • While those types of cases affect future profits, Johnson & Johnson and other health care companies are raising prices and getting more people to use their products and services.
  • Most health care sectors are expected to increase earnings per share by at least 8% this year, although pharmaceuticals will come in at slower rates, according to FactSet estimates.
  • Health care, unlike technology and nonessential consumer goods, is less exposed to tariffs, and the industry gets reliable cash flows through taxpayer funding and workers' paychecks.

What we're watching: Health insurance companies.

  • They've combined with pharmacy benefit managers, putting them on pace to become bigger than the Big Tech stocks this year, and they have routinely registered higher-than-expected profits the past few years.
  • The GOP tax law and a hiatus to an Affordable Care Act tax have helped, and now insurers avoided a regulation that would've eliminated a source of drug revenue.
  • Health insurance "earnings have been exceptionally strong, and we expect 2Q19 earnings to continue on this path," Barclays analysts wrote in an investor note.

Go deeper: Follow along with our updated health care earnings tracker.

Go deeper

New report hits DOJ over lack of police shooting data

Demonstrations followed the shooting of Dijon Kizzee by Los Angeles Sheriff's deputies in 2020. Photo: David McNew/Getty Images

A new government accountability report says the Department of Justice failed to consistently publish an annual summary of police excessive force data from 2016 to 2020, as required by federal law.

Why it matters: The data is crucial for the DOJ to monitor excessive force cases, and used to investigate law enforcement agencies with patterns of abuse. The DOJ can pivot off it to pursue court action to force reforms.

13 mins ago - Politics & Policy

Congressional leaders clinch support for crucial defense bill, debt limit votes

Senate Majority Leader Chuck Schumer passes waiting reporters on Tuesday. Photo: Eric Lee/Bloomberg via Getty Images

Congress has found a shortcut to pass its annual defense funding bill and raise the debt limit.

Driving the news: The House will vote Tuesday night on two major bills — one creating a one-time, fast-track process for the Senate to raise the debt ceiling with just 51 votes, and another passing its annual defense bill.

Biden's pick to lead major banking regulator drops out

Saule Omarova, nominee for Comptroller of the Currency, at a confirmation hearing on Nov. 18. Photo: Anna Moneymaker/Getty Images

President Biden's pick to head one of the country's most powerful banking regulators is dropping out of consideration for the post, according to a statement from Biden that accepted the withdrawal.

Why it matters: Saule Omarova, nominated to lead the Office of the Comptroller of the Currency, faced a tough path to confirmation — with opposition from Republicans and moderate Democrats.

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