Last week resulted in the biggest weekly gain for the stock market, measured by the S&P 500, in about a year. The rebound completely erased the prior week's 5% decline. Commodities also rose. Increased risk appetite by investors was also evident in the bond market. Economically sensitive high-yield bonds rallied while the safe haven demand for Treasuries diminished. Last week marked the first decline for Treasuries in a month, pushing 10-year yields up the most since April, finishing above the important 3% level.Why the sudden turnaround in sentiment on the outlook? While we cited a number of reasons for a rebound in our commentary last week, one catalyst we have been pointing to has finally arrived. The rebound in sentiment may have had to do, in part, with the second quarter earnings season due to kick off this week. The commitment to growth evident in the strong pace of spending by businesses during the quarter, and the rising private-sector employment numbers, suggest corporate leaders may reflect this improving outlook when they report their performance for the quarter and also in their guidance for future quarters. Four times a year investors focus on the most fundamental driver of investment performance: earnings. As you can see in chart 1, the performance of the S&P 500 and analysts' revisions to their Earnings Per Share (EPS) estimates are closely linked. A year ago investors were more hesitant than analysts to raise their outlook early in the recovery; however, they quickly caught up in the second half of 2009 as stocks soared. Then, earlier this year the stock market continued to soar even as analysts moderated their pace of upward earnings revisions. Back in April, as we entered the first quarter earnings season, we believed the stock market was due for a pullback as earnings were likely to be good, but not good enough to avoid disappointing lofty investor expectations. The recent stock market pullback has realigned analyst and investor expectations. This has set the stock market up for an advance if companies exceed analyst estimates and prompt a more favorable outlook.