Oliver Jones, a senior markets economist at Capital Economics, noted U.S. earnings were projected to be roughly 50% higher in 2023 than they were in the year immediately prior to the pandemic, significantly more than was anticipated in most other major economies.
"With so much optimism baked in, it seems likely to us that the tailwind of rising earnings forecasts, which provided so much support to the stock market over the past year, will fade," he cautioned.
Nasdaq futures were up 0.1% in early trade, while S&P 500 futures held steady.
As funds flock to Wall Street, Asian markets have been largely snubbed. MSCI's broadest index of Asia-Pacific shares outside Japan has been trending sideways since March and was up just a fraction on Monday.
Japan's Nikkei bounced 1.6% in early trade, but that was off a seven-month low. South Korea <>KS11> has fared somewhat better thanks to demand for tech stocks but was little changed on Monday.
The week is also packed with U.S. data that should underline the economy's outperformance. Second-quarter gross domestic product is forecast to show annualised growth of 8.6%, while the Fed's favoured measure of core inflation is seen rising an annual 3.7% in June.
The Federal Reserve meets on Wednesday and, while no change in policy is expected, Chair Jerome Powell will likely be pressed to clarify what "substantial further progress" on employment would look like.
"The main message from Fed Chair Powell’s post-meeting press conference should be consistent with his testimony before Congress in mid-July when he signalled no rush for tapering," said NatWest Markets economist Kevin Cummins.
"However, he will clearly remind market participants that the taper countdown has officially begun."
So far, the bond market has been remarkably untroubled by the prospect of eventual tapering with yields on U.S. 10-year notes US10YT=TWEB having fallen for four weeks in a row to stand at 1.28%.
The drop has done little to undermine the dollar, in part because European yields have fallen even further amid expectations of continued massive bond buying from the European Central Bank.
The single currency has been trending lower since June and touched a four-month trough of $1.1750 last week. It was last at $1.1770 EUR= and looked at risk of testing its 2021 low of $1.1702.
The dollar has also been edging up on the yen to reach 110.57, but remains short of its recent peak at 111.62. The fall in the euro has lifted the dollar index to 92.891, a long way from its May trough of 89.533.
The rise in the dollar has offset the drop in bond yields to leave gold range-bound around $1,800 an ounce.
Oil prices have fared better amid wagers demand will remain strong as the global economy gradually opens and supply stays tight.
Brent was trading 23 cents firmer at $74.33 a barrel, while U.S. crude added 20 cents to $72.27.
(Editing by Sam Holmes) ((Wayne.Cole@thomsonreuters.com; 612 9171 7144; Reuters Messaging: email@example.com))
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