US earnings season has certainly got off to a strong start. Second-quarter earnings are now projected to rise 75 per cent. Thus far, 85 per cent of S&P 500 companies have beaten earnings targets, with 90 per cent topping revenue estimates.

If this persists, notes FactSet, it will mark the second-highest beat rate since the firm began tracking the data in 2008.

Growth in Europe is expected to be even more spectacular, with analysts projecting a 140 per cent increase in second-quarter earnings. Analysts have raised their European earnings projections by more than 50 per cent over the last six months, according to Bank of America data.

Of course, growth looks especially high because of the extent of Europe’s earnings collapse 12 months ago. Indeed, even after the huge spike in estimates, earnings across Europe’s Stoxx 600 index are expected to remain just below their pre-pandemic spike.

In contrast, European stock prices are comfortably above pre-pandemic levels, a reminder that a strong earnings recovery is already baked into market prices.