A distinct lack of euphoria surrounds New Zealand and other sharemarkets, despite many of them hitting record highs in recent weeks.
In New Zealand's case, much of that reserve can be put down to the proximity of the reporting season.
To that end, investors will be hoping that Fletcher Building's latest earnings downgrade is not representative of the earnings season as a whole.
In the United States, the June quarter reporting season has been tracking along nicely as it approaches the halfway point, which has helped to push the major US indices higher.
At press time, almost 200 of America's S&P 500 companies had reported results, with 81 per cent exceeding earnings forecasts and 75 per cent beating revenue estimates.
Even so, fund managers are approaching the US market with caution.
A survey of fund managers undertaken by Northern Trust said 63 per cent of respondents saw the historically low levels of the Chicago Board Options Exchange Volatility Index as evidence that there was too much complacency in the markets.
Nearly half of managers viewed US equities as overvalued by up to 10 per cent and another 17 per cent believed US equities were overvalued by more than 10 per cent, Northern Trust said.
Make or Break
Mark Lister, head of private wealth research at Craigs Investment Partners, said local earnings would be the focus in coming weeks as investors look for information to validate the S&P/NZX 50 Index's 12.1 per cent gain in the year to date.
"For me it's going to be a crucial make or break reporting season for the New Zealand sharemarket because we have had such a blinder," Lister said.
"The market will need to deliver earnings to satisfy people's expectations," he said. "Many of those companies that have enjoyed good quality share price performance are going to have to deliver good results."
Lister said Fletcher Building's two major earnings downgrades this year had spooked the market.
"The good news for the market is that Fletcher Building's issues seem to be industry and company-specific," he said.
"I don't think that the dramas that [you] are seeing at Fletcher Building are a reflection of what you [are] seeing in the broader economy."
Lister said the market would need to see some "decent" numbers. "I think they will be decent, but the question is, will they be good enough?"
Air NZ flies high
Air NZ's share price has performed strongly over the past 12 months - closing yesterday at $3.35, up from $1.715 last October.
The company's chairman, Tony Carter, said at the interim result's release in February that he expected the revenue environment to improve in the second half but that higher jet fuel prices would be a headwind.
Based on expectations for the average jet fuel price in the second half of the year of US$65 per barrel, the airline was targeting 2017 profit before taxation to be in the range of $475m to $525m.
Last year's pre-tax profit shot up by 40 per cent to $663m on the back of higher passenger numbers courtesy of the tourism boom and lower fuel prices, and was the best in its 76-year history.
Air NZ's annual result is due on August 23.
The company's shares have started trading in the United States as American Depositary Receipts (ADRs) in the over-the-counter market, with Deutsche Bank as its nominated depositary bank.
The ADRs, quoted in US dollars, will initially represent 20 ordinary shares in the airline.
As of August 14, the ratio will change and each ADR will then represent five ordinary shares of Air NZ, the company said.
An ADR is a negotiable US security that represents an equity holding in a non-US entity.
The main advantage for local companies trading as an ADR in the US is that it makes the companies available to those US funds that are mandated to invest in only US companies.
Spark and Auckland International Airport already trade as ADRs in the US.