What's going on?

Wall Street is getting prepped for quarterly �earnings season,� (tweet this) and the release of companies� results over the coming weeks may be even more important than usual for investors.

What does this mean?

Over the next month or so, most publicly traded US companies will report their first quarter performance to investors. Wall Street research analysts are predicting that profits will have increased about 10% versus the same quarter last year, which would be the best growth in more than two years. It�s partly so important this quarter because investors are unsure about the performance of the overall US economy (some data looks great, some suggests that there�s hardly been any growth). By analyzing how companies performed, investors will get a better idea of the overall environment.

Why should I care?

For the markets: Improving earnings probably don�t get enough credit for the stock market rally.

An improving global economy and President Trump�s proposed policies got a lot of credit for the increase in stock prices over the past six months � but earnings were likely another important factor. In October of last year, US companies reported their first quarter of increasing profits in a year. Perhaps more importantly, revenue has also been increasing in recent quarters, which suggests companies are growing, not just cutting costs to boost profits. As companies� performances have recovered, it�s no coincidence that stock markets (globally) have done so well.


The bigger picture: US earnings season matters to investors globally.

As the world�s most valuable stock market, investors all over the world are, of course, interested in the US market. But it�s also important because so many large, multinational companies are based in the US. The performances of firms like Facebook, Apple, McDonald�s and others reflect not just the US economy but global activity as well � and international markets often reflect news from US earnings announcements.