As we're grinding to the end of this quarter's earnings season, the results are kind of mixed. With reports in from 92 percent of the companies in the S&P 500, earnings per share are up just 2.1 percent from a year earlier. Even more troubling is that analyst forecasts show S&P earnings rising just 1.4 percent for the full year, which would be the worst year since the recession ended in 2009.
But the markets don't seem exceptionally nervous; the S&P 500 closed at another new record just this past Friday. One big reason for optimism is that the two primary problems affecting first-quarter earnings, low oil prices and the high dollar, have reversed course so far in the second quarter.
Crude-oil futures are up 37 percent from their 2015 low; that might not be so good for drivers, but it's great news for energy stocks. The dollar has fallen 8 percent against the euro from its March high, which is great news for exporters. All told, we might see earnings bounce back some in the second quarter.
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