Great expectations

No matter how many challenges get thrown at the stock market, one pillar of support is helping to prop it up: corporate profits are continuing to soar.

Earnings per share jumped more than 20 percent in the first three months of the year, and analysts are looking for similar growth when companies report their results for the spring. Reporting season is about to get underway, with Citigroup, JPMorgan Chase and Wells Fargo scheduled to unveil their second-quarter results on Friday. Across the S&P 500, analysts are forecasting growth of 19 percent, according to S&P Global Market Intelligence.

Lower tax rates are helping companies hold onto more of each $1 in revenue as profits. But a strong global economy is also creating more dollars in revenue. That’s why analysts predict earnings growth for nine of the 11 sectors that make up the S&P 500.

The strongest growth for the second quarter likely came from energy producers, which benefited from oil’s price rise. A barrel of crude hit its highest price since 2014, which means bigger profits not only for producers but also the service providers that help them pull oil from the ground.

Companies likely need to match those high expectations, just to keep their stock prices where they are. Interest rates are rising, which tends to pull down stock prices, and worries about global trade have also hurt the market.