The spring chill some feared would once again sap the US's fragile economic recovery appears to have held off as American firms have reported better-than-expected first-quarter earnings.
The earnings season started in earnest this week with Alcoa, Google and JP Morgan reporting better-than-expected results. The figures will be a boost to president Barack Obama who has put the economic recovery at the centre of his reelection campaign.
But Obama isn't out of the woods yet. Disappointing news from the jobs market has shown how fragile the economy remains, and next week another raft of US giants will update the markets on how they are fairing, including Goldman Sachs, Intel, McDonald's and Microsoft.
US stock markets closed down on Friday after their worst week of the year, on fears of slowing growth in China and continuing problems in Europe.
Jack Ablin, chief investment officer at Harris Private Bank, said this week had solidified his opinion that the economy was on the mend. "The outlook looks pretty robust and across a range of industries. We've had good results from Alcoa, Google, JP Morgan, it's encouraging," he said.
At the same time he said there was a lack of trust in the stock markets. For two years now, stock market rallies have fizzled in the first quarter. Last year Europe's economic crisis and the tragic tsunami and earthquake on Japan wiped out rallies in the markets.
Last month's news that jobs growth had slowed added to fears that history was repeating itself, said Ablin. "Before 2008, no one knew what a Black Swan was. Now everyone is looking for one," he said.
Steven Cochrane, managing director of Moody's Economy.com, said the earnings reports were a better indicator of the wider economy than recent jobs reports, as those may have been influenced by seasonal factors including the extremely mild winter.
"We are still adding 175,000 to 200,000 jobs a month, and that's enough to stabilise the jobs market and keep unemployment falling," he said. He said that the economy did now look like it was on a firmer footing, but added: "So much nervousness remains, in part because the recovery is still so slow," he said.
Worries over the impact of rising gas prices and the still-lacklustre housing market were weighing on consumer confidence and likely to add to more volatility in the markets in the months to come, he said.
Cochrane said that Europe's continuing woes were still a worry in the US, although far less pressing at the moment than they had been. Europe remains is crisis even as the US appears to be pulling out of its historic slump. Next week the International Monetary Fund meets in Washington. IMF managing director Christine Lagarde struck a cautiously optimistic note this week, saying that the IMF might not need as large a boost in financial resources as first thought to address Europe's debt crisis.
"We have seen some improvement in the economic climate," she said. "But let me also underline this point: The risks remain high, the situation fragile."
