The ultimate measure of an economy is its ability to generate wealth. Second quarter earnings season begins with Alcoa today after US trading and broad markets will look to companies for insight on the strength of the US and global economy.

What’s becoming clear is that analysts (and probably the market in general) has grown much more confident about the US economy despite only marginal improvement in economic data. Bloomberg highlights the growing divergence between profitability and optimism.

Standard & Poor’s 500 Index earnings rose 1.8 percent last quarter, down from a projection of 8.7 percent six months ago, according to more than 11,000 analyst estimates compiled by Bloomberg. At the same time, share-price targets for companies … are rising at the fastest rate in two years. The U.S. equity gauge will increase 8.9 percent to a record 1,777.91 should the forecasts prove accurate.

The key factor is confidence. A market can rise for a long time on confidence but it can be shattered spectacularly when profits and guidance don’t match expectations.

Today, S&P 500 futures are 9 points higher to 1635.