Earnings Outlook: Four key sectors to watch closely this earnings season

The second-quarter earnings season kicked off in earnest on Friday with the first reports from big banks, and investors should now brace for what will be a key test of sentiment.

The stock market is at lofty levels after repeatedly setting records this year, and companies need to show earnings growth to justify the move. Even the Federal Reserve has pointed out that stock valuations are above historical norms, a view that was repeated this week by Chairwoman Janet Yellen in testimony to the House Financial Services panel.

The FactSet blended year-over-year per-share earnings growth rate estimate for the S&P 500, which combines results for those companies that have reported (companies with a fiscal quarter that ended in May) with those still to come, stood at 6.3% on Wednesday.

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