Profits kick off with sky-high forecasts and record stock market



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Wall Street is heading into earnings season this week with high expectations after strong earnings fueled a stock rally in the first half of the year.

Fund managers will watch whether companies beat Wall Street’s earnings forecast again. The S&P 500 has gained 16% this year and posted 38 record-breaking closings, most recently on Friday.

With market valuations above long-term norms, investors will also look to executives for clues as to what the future holds for corporate earnings.

“Are people rewarding the markets even more compared to the levels we are seeing today?” said Amy Kong, chief investment officer at Barrett Asset Management. “It really depends, I think, on what the management teams would say. “

This week, investors will analyze the results of large banks like JPMorgan Chase & Co. and Bank of America Corp., as well as companies ranging from PepsiCo Inc. to Delta Air Lines Inc. to UnitedHealth Group Inc.

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