Welcome to the Last Hurrah for US Earnings

The US corporate earnings season could prove to be half decent, but don’t expect the market to celebrate. The prospect of a looming recession is becoming too real for investors to get hung up on last quarter’s success.

Consider the economic backdrop. Macroeconomic data suggest that key parts of the US economy have held up until now, which makes it easier for companies to beat modest quarterly earnings projections. New orders for capital goods, which usually track corporate earnings closely, have maintained their upward trajectory.

Households have mostly bucked inflation and recession fears to keep spending, as personal consumption expenditures show.

And the job market has remained unusually strong.