Earnings season is under way in the US and the results are bad. Entering this week, brokers’ analysts were expecting first-quarter earnings for S&P 500 companies to come in 35.3 per cent below their level of last year’s first quarter. They are on course for a seventh consecutive quarterly decline, according to Thomson Reuters.

But there are reasons for optimism. Projected earnings for the quarter have risen slightly in the past two weeks, reversing months of steady downgrades by brokers. However, this owed much to the new flexibility financials have been given in accounting for their losses.