Despite the growing threat, US companies are expected to usher in a strong earnings season.

With the start of this week's earnings season, according to data compiled by data provider FactSetCompanies in the s & p 500 are expected to achieve nearly 22% year-on-year profit growth in the last quarter of 2021, compared with nearly 40% in the previous quarter.

According to the Financial Times, John Butters, a senior analyst at FactSet, saidNine of the 11 sectors in the S & P 500 are expected to see earnings growth in the fourth quarter, with energy, industry and materials likely to lead growth.The sectors where profits are expected to shrink are utilities and finance.

Wall Street fluctuated at the start of the year as investors scrutinized the Fed's more aggressive approach to fighting inflation at the start of the earnings season.

Binky Chadha, chief strategist at Deutsche Bank, said that given the "extraordinary collapse and surge in corporate profits" caused by the COVID-19 epidemic, it would be more meaningful to study the changes in fourth-quarter profits compared with the previous quarter than the annual data. On that basis, if seasonality is taken into account, corporate earnings are expected to fall by about 4.6 per cent quarter-on-quarter, Chadha said.

Us corporate profits have recovered strongly from the lows caused by the epidemic. The S & P 500 trades at 21 times forward earnings over the next 12 months, up from 23 times a year ago, although the index has risen 23 per cent over that period.

However, the price-to-earnings ratio of US stocks is still well above the average of about 16 times over the past 20 years, according to FactSet. Analysts sayDisappointing corporate performance may make stocks look more expensive, making them less attractive to investors.

According to the Financial Times, Bank of America Corporation's head of US equity strategy, Savita Subramanian, said:

Better-than-expected economic data, earlier results, reliable Bank of America Corporation credit card data and early signs of stronger-than-expected holiday sales all suggest that overall earnings for US companies are likely to beat expectations this quarter.

Delta will report results on Thursday. Then on Friday, JPMorgan Chase & Co, Citigroup Inc, Wells Fargo & Co and asset management giant Blackrock will announce their results.