Although it will take some time before all the numbers are finally tallied, analysts are almost unanimous in expecting one of the weakest quarters in the past five years. According to most estimates, the S&P/TSX 60 Index is expected to grow a meager 4.5% during the second quarter. On a more positive note, most analysts also agree that the worst may be behind us.

For the past five years, Canada's corporate sector has managed to consistently pull double-digit growth rates, although longer-term historical average recorded a growth rate of only about seven percent. Apparently, analysts perceive the latest 4.5% growth rate as a sign that earnings have finally bottomed out. This could also mean that, for the second half of 2007, earnings would have nowhere else to go but up!

Help is coming from companies with significant international operations as global economic growth has been explosive. Of course, this is mostly due to emerging Asian economies. As a result, operations have balanced out revenues versus expenses quite well for these overseas companies, resulting in stronger earnings.

In terms of growth expectations for the remainder of the year, analysts agree that earnings in Canada will grow 9.3% and 14.9% for the third and fourth quarters respectively. Some analysts are going as far as to proclaim that the "earnings recession" is not likely to repeat itself.

Of course, Canadians are very much concerned with how fast the U.S. economy will grow, considering the U.S. is our largest trade partner. The consensus is that while economic growth south of the border is not going to be nearly as robust, it will manage to churn out between six percent and 6.5% for the remainder of the year.

Much of the earnings recovery in the U.S. is dependent on how well the troubled automobile sector fares in the coming months. Next in the impact line is the consumer discretionary, where year- over-year growth is estimated at 26% for the fourth quarter. Of course, if car sales fail to materialize, we would be more likely talking about single-digit growth rates again.

In Canada, the turnaround will be powered by the energy sector. Analysts expect that particular segment to grow at a whopping 43% year-over-year for the fourth quarter, carried by stronger commodity prices. If this pans out, such a shift would be in striking contrast to the second quarter, when the sector actually contracted by four percent.