We head into the thick end of the corporate earnings season this week with the bull market still running hot on the NZX.

Just how actual earnings compare with the elevated heights at which many stocks are now trading will be fascinating to see.

Demographics, the growth of KiwiSaver and historically low returns from bank deposits have all been huge drivers of growth on the local market.

It is hardly surprising that a gap is growing between the financial performance and valuation of many stocks on the market.

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The NZX has delivered returns of 18 and 16 per cent in each of the past two years and is already up about 4 per cent in 2015.

But where is the boom in earnings, the surge in corporate revenue, to drive growth and productivity, boost wages and create real wealth?

The benign economic environment of the past three years has provided a platform for the equity boom but benign does not equal dynamic profits.

While the economy has been solid that doesn't appear to have yet translated into great levels of consumer or business confidence - despite what some of the surveys say.

Many corporates remain extremely cost-conscious and cautious about expansion. Consumers remain circumspect too - at least compared to the credit- fuelled domestic boom of the 2000s.

Inflation is low to non-existent and when you remove Auckland and Christchurch housing and the slosh of dairy money (which commodity markets just have) we may already be in a deflationary environment.

The Reserve Bank does remain relatively relaxed about the medium to long term outlook, if just because the migration story continues to underpin growth.

But as the spectre of deflation hangs over the Western world, economies that stall will find it that much harder to get moving again.

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As ASB economists pointed out last week, inflation is likely to stay under 1 per cent for most of 2015.

The long-awaited rise in interest rates is on hold. We may even see rates come down, certainly retail rates are being squeezed again. And if signs of inflation fail to emerge this year we may yet see the Reserve Bank cut the official cash rate further.

Where then does the savings money go? For now, at least, equity markets around the world are on a roll.

Wall Street continues to hit fresh record highs. Despite plenty of commentary warning that stocks there are over-priced, few US pundits are picking a correction any time soon.

Optimism about the long, slow awakening of the American economy remains high.

In New Zealand the markets are benefiting from hard work done in the wake of the finance company meltdown we experienced during the global financial crisis.

There is public confidence in the NZX and in the quality of companies trading on it.

This hasn't been a crazy bull market. Most of New Zealand's big stocks have been on a strong and steady growth path.

But big market valuations require big earnings to remain sustainable.

Earnings have been solid but with signs emerging that economic growth may have already peaked in the medium term there is a risk that the already elevated earnings multiples on which companies are valued, start to look precarious.

It is not time for panic stations and with a boost from low oil prices we might see more life in the domestic economy yet.

But this season it will be interesting to look at revenue growth. Which companies are actually boosting profits by growing sales. Or, forthat matter, by making acquisitions and driving their own expansion path.

We certainly haven't seen the level of M&A activity in this bull market that we saw at its peak before the global financial crisis.

Risk appetites remain subdued and potentially buyers - including the big private equity players - will remain cautious about heavily leveraged deals based on bullish valuations.

After the golden economic year New Zealand's just had we should hopefully see some glowing results from our biggest listed companies, but the serious investors will have their focus firmly on the outlooks and updates that the companies deliver about the year ahead.

They'll be looking for signs of sustainable growth in this new low-inflation world.