Corporate America is used to making money. But not like this

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It’s been quite some time since Corporate America saw numbers this good.

What’s happening: Earnings season kicks off in earnest on Tuesday, and expectations for corporate profits are extremely high. According to FactSet, S&P 500 companies are due to report year over-year earnings growth of 64% for the second quarter, the biggest jump since the end of 2009.

And results could be even better than expected. During the past four quarters, earnings reported by S&P 500 firms have beaten estimates by 20% on average.

Soaring profits will testify to the strength of the economic recovery from the pandemic. But the jump in earnings also looks strong because of how bad spring 2020 was.

Remember: Between April and June of last year, the US economy shrank by a record annual rate of 31.4%.

In part for this reason, the second quarter “will almost certainly end up being the peak in earnings growth for this cycle,” LPL Financial strategists Jeffrey Buchbinder and Ryan Detrick told clients.

“Despite the historic upside and significant growth in the first quarter, earnings are expected to grow even faster in the second quarter, though certainly helped by the comparison to the lockdowns of second quarter 2020,” they said in a research note.

Investors are buying into the hype. Banks due to report shortly were among the top performing stocks on Monday, when the Dow, S&P 500 and Nasdaq Composite all closed at all-time highs.

This just in: JPMorgan Chase (JPM), America’s largest bank, said Tuesday that it hauled in $11.9 billion in profit during the second quarter, up 155% from the same period in 2020.

Watch this space: Wells Fargo analyst Christopher Harvey thinks Wall Street will be particularly tuned in to how companies address rising costs from tangled supply chains. He notes that many firms are already struggling with higher prices but have yet to pass those costs on to consumers, hurting their profit margins.

Take McCormick (MKC), which makes spices and condiments. Earlier this month, the company told analysts that it’s “raising prices where appropriate” to offset costs — but noted that “there is a lag time associated with pricing,” which means most changes won’t take effect “until late 2021.”

Harvey said that “companies that have been more proactive on pricing are more likely to see positive post-earnings stock reactions.”

Unicorns are having a hot 2021

A parade of high-profile companies, including Coinbase, Bumble, Oatly, SoFi and Roblox, made their stock market debuts in the first half of 2021. The second half of the year is poised to bring even more buzzy unicorns to Wall Street, my CNN Business colleague Paul R. La Monica reports.

Monitors display Bumble Inc. signage during the company's initial public offering (IPO) in front of the Nasdaq MarketSite in New York, U.S., on Thursday, Feb. 11, 2021. Bumble Inc., the dating app where women make the first move, is targeting to raise as much as $1.8 billion from its U.S. initial public offering after boosting the size of the deal.

Related article Unicorns are off to a hot start in 2021. Many more are on the way

Trading app Robinhood and yogurt maker Chobani both filed for initial public offerings earlier this month.

Instacart, which just named a new CEO from Facebook, is rumored to be mulling an IPO. Eyeglasses seller Warby Parker, fintech firm NerdWallet and Walmart-backed Indian e-commerce juggernaut Flipkart also could go public in the next six months.

Know this stat: More than 200 IPOs have started trading this year, according to research firm Renaissance Capital. That’s up more than 200% from a year ago, when the markets were largely frozen due to the Covid-19 pandemic. But it’s also significantly higher than the 80 IPOs from the first half of 2019.

The class of 2021 IPOs have collectively raised about $80 billion, a surge of nearly 250% from this time last year and up sharply from the $30 billion raised by IPOs in the first six months of 2019.

Some firms like Robinhood will offer shares via the traditional initial public offering process, but more direct listings and mergers with special-purpose acquisition companies, or SPACs, are expected, too.

“The range of ways to go public has changed forever,” said Kelly Rodriques, CEO of Forge, a company that lets people sell shares of private companies. “There is more flexibility now with direct listings and SPACs.”

The pandemic has made the US economy more productive

Covid-19 has dramatically changed how many people work. And according to Goldman Sachs, that’s boosting productivity.

Since the crisis started, annualized growth in output per hour has jumped 3.1%, the investment bank said in a report published this week. That’s compared to a 1.4% rise “in the previous business cycle.”

“Stronger productivity growth has been one of the silver linings of the pandemic,” strategists said.

What gives: Goldman attributes the gains to the benefits of digitization. It said they’re “most pronounced in industries where virtual meetings are feasible and in-person expenses like travel [and] entertainment have scope to decline,” such as IT services, professional services and product development roles.

The retail industry has also become more productive thanks to a rise in curbside pickup and online shopping.

Staying power: Even as workers head back to their offices, resuming face-to-face meetings and commutes, output is expected to remain strong.

Goldman noted that “efficiency improvements from digitization” held in the first three months of the year “despite the reopening of the in-person economy and the partial return to corporate office buildings.”

Up next

Conagra (CAG), Goldman Sachs (GS) and PepsiCo (PEP) report results before US markets open.

Also today: The June Consumer Price Index, a crucial metric of US inflation, posts at 8:30 a.m. ET.

Coming tomorrow: Bank earnings continue with Citi (C), Bank of America (BAC) and Wells Fargo (WFC).