Earnings season has started far better than forecasts anticipated

Markets are not yet reflecting upbeat news of resilient consumer spending, positive big tech results, and firms' confident forecasts

Heavyweights Microsoft, Google-owner Alphabet and Facebook-parent Meta all delivered upbeat results last week. Stock picture: Brian Lawless

Investors have had plenty to cheer this earnings season so far — resilient consumer spending, upbeat big tech results, and confident economic outlooks from corporate executives. Yet, the stock market is not reflecting the optimism.

The sharp US and European equities rally ahead of results stretched valuations and raised the bar for further gains, but worries about a recession and higher interest rates have capped sentiment.