Every three months, publicly listed companies publish their financial results, revealing how much revenue and profits they have earned, how their businesses are performing and what they expect for the future. This period is known as earnings season.
For investors, these announcements provide an important insight into the health of the economy. Rather than relying solely on economic forecasts or sentiment surveys, we can examine what is actually happening inside some of the world’s largest businesses.
The latest results are delivering an encouraging message: consumers are continuing to spend, businesses are investing, and corporate profits are growing strongly.
According to FactSet, approximately 24% of companies in the S&P 500, the index of America’s 500 leading listed businesses, have reported their third-quarter results so far.
Of those companies, 83% reported earnings above analysts’ expectations, a higher proportion than the five-year average of 78%. When companies outperform expectations, on average we expect share prices to rise, so this is a bullish signal for stocks.
Meanwhile, earnings across the S&P 500 are now expected to grow by approximately 29.5% compared with the same quarter last year, slightly ahead of the 29.2% growth forecast at the end of September.
Consumer spending is one of the most important drivers of the US economy, accounting for approximately two-thirds of economic activity. Recent results from some of America’s largest banks have provided encouraging evidence of continued spending. JPMorgan Chase reported a +10% increase in credit and debit card spending, while Bank of America reported an +8% increase.
More recent results from American Express reinforced that message, with customer spending increasing +8% and revenue growing +9%, supported by strong demand for travel and entertainment.
These figures suggest that, despite concerns about inflation and economic uncertainty, American households are continuing to spend.
We also have encouraging new developments in the strength of results from major industrial companies.
GE Aerospace, one of the world’s leading manufacturers of aircraft engines, reported a remarkable +49% increase in orders, alongside +18% growth in adjusted revenue.
Honeywell reported +7% organic sales growth, while aerospace and defence manufacturer RTX reported an +11% increase in quarterly sales and a record order backlog of $340 billion.
These figures are particularly significant because they reflect real economic activity: companies ordering equipment, investing in infrastructure and committing capital to future projects.
And Europe is showing encouraging signs too. Swiss engineering group ABB reported a +40% increase in orders, supported by strong demand for electrical equipment and data-centre infrastructure. German software giant SAP reported +26% growth in cloud revenue, demonstrating that businesses continue investing in technology and digital transformation. French cosmetics group L’Oréal also reported healthy sales growth, providing further evidence of resilient consumer demand.
Together, these results suggest that investment and spending remain healthy across several important areas of the European economy.
What does this mean for investors? The message from earnings season so far is becoming increasingly encouraging.
Consumers are spending, businesses are investing, and corporate profits are growing at a substantial rate.
For long-term investors, this is an important reminder that the stock market ultimately represents ownership in real businesses, whose value is closely connected to their ability to generate growing profits over time.
Although performance of equity markets has been positive so far in 2026, the continued strength in corporate earnings indicates that there is significant short-term upside to prices from here.
Disclaimer: The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Capital Strategies Limited or its related companies. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.
