The predictions for an end to the earnings recession have passed their first test.

Of the 32 S&P 500 companies that have so far reported earnings, they are beating Wall Street's expectations by an average of 9% on earnings per share, according to Bank of America Research's equity strategy team. In aggregate, after two quarters of declines, EPS for S&P 500 companies is up 1% compared to the same quarter last year in a sign that corporate America's earnings recession may be over.

In a research note Monday, RBC Capital's head of US equity strategy Lori Calvasina described the start of earnings season as "solid" despite "macro headwinds."

And, importantly, despite challenges such as sticky inflation and a higher for longer stance from the Federal Reserve, RBC raised its S&P 500 EPS forecast. RBC's latest accounting for recent macro movements pushed their projections higher, with S&P 500 earnings up to $223 (from $220) in 2023 and $232 (from $229) in 2024.

But while the estimate boost for Q3 earnings could imply a more glossy outlook for the index, Calvasina's S&P 500 price target for 2023 remains unchanged at 4,250, as the strategists note S&P 500 EPS is just one of several things that drive their calls.

When zooming out beyond just earnings, Calvasina still finds the macro picture to be choppy.

"Our review of S&P 500 earnings call transcripts since late September suggests the macro is taking a toll," Calvasina wrote. "Companies continue to emphasize the resiliency of a consumer who has become more selective in their spending. We are also reading about how macro uncertainty, including inflation and interest rate policy, are impacting demand and spending, though this is more on the corporate side. Pricing commentary remains mixed, with a fair amount of emphasis on how it’s moderating."

Throughout the early part of earnings season, though, the numbers companies report are appearing to drive stock action rather than the headwinds they may be commenting on.

Perhaps no earnings release was a clearer example of this than JPMorgan's (JPM). The head of America's leading financial institution had a grim view on the geopolitical tensions in the Middle East.

"This may be the most dangerous time the world has seen in decades," JPMorgan chairman and CEO Jamie Dimon said in the company's earnings release.

But despite the characterization, JPMorgan investors seemed more focused on another blowout quarter for profits as the stock rose more than 1.5% on Friday.

The same could be said for the S&P 500, which is up nearly 1% since Pepsi reported strong results on Oct. 10.

Josh Schafer is a reporter for Yahoo Finance.

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