The inventory market is operating sizzling coming into first-quarter earnings season.

A formidable rally has propelled the S&P 500 up 9.9% this 12 months to twenty report closes, conserving inventory valuations at historic highs. Some buyers, although, say shares could have extra room to run because the rollout of Covid-19 vaccines and bountiful authorities spending strengthen the outlook for company earnings.

Earnings season kicks off in earnest this week, with outcomes from America’s large banks—together with JPMorgan Chase & Co., Financial institution of America Corp. and Wells Fargo & Co—and firms starting from Delta Air Strains Inc. to PepsiCo Inc. and UnitedHealth Group Inc.

Buyers will likely be looking forward to indicators of confidence from executives that buyer demand will hold rising and value will increase may be managed to assist ease their issues that shares are wanting costly.

The S&P 500 traded Thursday at 22.6 instances its projected earnings over the following 12 months, above the five-year common of 18.14, in accordance with FactSet. Paying up, even for shares of high-quality firms, raises the prospect of muted future returns for shareholders.