New York CNN Business  — 

1. Earnings optimism: Corporate America’s earnings recession might be over before it even began.

Once-booming corporate profits were expected to drop in the first quarter. Sharply. But first-quarter results from the likes of Facebook (FB), Amazon (AMZN) and Ford (F) have easily cleared Wall Street’s lowered expectations.

Bottom lines have been boosted by an economy that looks healthier than feared.

Now, some analysts believe profits may not actually decline at all in the first quarter, a welcome shift from the doomsday scenarios investors were once fretting about. S&P 500 earnings haven’t fallen year-over-year in any quarter since mid-2016.

At the start of first-quarter earnings season, Wall Street analysts expected a decline of 2.5% in per-share profits, according to Credit Suisse. As of Friday morning, that estimate had climbed narrowly into positive territory.

Accounting for earnings that surpass expectations (analysts typically set the bar low), S&P 500 profits will probably rise by 2.5% to 3% by the end of earnings season, Credit Suisse estimates.

That reversal helped propel stocks higher. The S&P 500 and Nasdaq notched record highs last week. And the Dow isn’t far behind. All three major indexes are up double digits in 2019.

It’s no fluke. We’re well into earnings season: The S&P 500 companies that have already reported earnings make up half of the index’s value. Results have impressed so far.

Nearly 80% of companies have reported bottom-line results that exceeded Wall Street’s expectations, above the three-year average of 71%, according to Credit Suisse.

Wall Street isn’t out of earnings trouble yet, though.

A long list of corporate titans are scheduled to hit the earnings stage this week, led by Apple (AAPL), Alphabet (GOOGL), General Motors (GM), General Electric (GE), McDonald’s (MCD) and Under Armour (UA).

Simply topping expectations isn’t enough to please shareholders these days.

Companies that have beaten earnings estimates have gained less than 1% on their earnings reaction days, according to Bespoke. That’s less than half the average one-day gain of 1.9% over the prior two decades.

And Wall Street has hammered companies that miss. For example, Post-It maker 3M (MMM) plummeted nearly 13% on Thursday after reporting weak results and slashing its outlook.

Companies that have missed earnings-per-share estimates this month have declined by an average of 4.6%, compared with the historical average of 3.5%, according to a research report from Bespoke Investment Group on Friday.

One major area to watch is corporate revenue, which has lagged thus far.

Only 54% of companies that have reported results have beaten revenue estimates, according to Bespoke Investment Group.

“That is definitely a concern,” Bespoke analysts wrote.

2. Fed guidance: The Federal Reserve is holding its two-day April and May policy meeting this week, culminating in its interest rate decision and policy update on Wednesday at 2 pm ET.

It’s widely assumed the central bank won’t change its interest rates. The CME FedWatch shows the market prescribes a 98% chance that rates will be kept on hold. Still, the meeting could be market-moving. Investors will be paying attention to Fed Chairman Jerome Powell’s views on the economy.

After raising rates four times last year, the Fed took its foot off the gas in January, throwing financial markets into a frenzy. Investors began wondering whether the next move for the central bank would be to lower rates again, which is intended to stimulate the economy. Friday’s GDP print, however, should have put those worries at ease, at least for now. The United States reported a growth rate of 3.2% between January and March, along with muted inflation. That gives the Fed some more wiggle room to let the economy run its course.

3. Jobs, jobs, jobs: A lot of key economic data is on the agenda for this week, including personal income, manufacturing and trade data. Arguably most important, however, is Friday’s jobs report, due at 8:30 am ET, which includes non-farm payrolls and hourly wages. The unemployment rate is expected to remain flat at 3.8%.

Last month, the headline number was better than expected, but wages lagged behind.

Wage inflation has been stubbornly low, to the dismay of both market participants and central bankers. The Fed’s inflation target is around 2%, but wage inflation numbers have raised questions about the use of inflation targeting.

In the run up to the report on the employment situation, jobless claims for the week ended April 27 are due on Thursday. Claims are expected to be 215,000, according to Refinitiv.

4. King dollar: Less staunchly dovish words from the Fed, as well as further economic data hammering home the point that the US economy is healthy, could also inspire the US dollar higher.

Compared with its peers, the United States is the strongest economy on the block. And unless this week’s Eurozone GDP print surprises on the upside, there is little to challenge the dollar’s supremacy. While a lot of the good stuff is priced into the buck already, analysts say it remains too attractive to miss out on.

On Thursday, the ICE US Dollar Index reached its highest level since May 2017.

5. Coming this week:

Sunday — Milken Global Conference kicks off in California

Monday — Eurozone economic sentiment; Boeing shareholder meeting; Spotify (SPOT) and Alphabet earnings

Tuesday — Eurozone GDP; April consumer confidence; Fed meeting starts; China manufacturing PMI; GM (GM), GE and Apple earnings

Wednesday — Fed decision; Yum Brands and CVS (CVS) earnings

Thursday — Bank of England policy update; Under Armour (UA) and Dunkin’ (DNKN) earnings; weekly jobless claims; Caixin China manufacturing PMI

Friday — Jobs report; Eurozone inflation, Fiat Chrysler (FCAU) earnings

All week — Japan’s markets are closed until May 6 for Golden Week. The holiday goes on for six days in a row for the first time this year, which could lead to volatility in Asian markets amid lower liquidity.