Are Alcoa's earnings indicative of the health of the world economy?

Second quarter earnings season kicked off with the usual hype going into Alcoa reporting their numbers after the close with anticipation that a beat or a miss could pre-empt the outlook for the rest of earnings season. However in a surprise turn of events that underplayed many analysts, its age old aluminum business that's set to be unbundled off in the next few months outperformed better than expected.

This gives the first hints of a much needed recovery in the resources sector that's been plague by a protracted slump in recent times resulting in producers drastically cutting back on capital expenditure projects in an effort to well up cash flows.

More specifically the resilience shown in aluminum markets in 2016 when an initial bounce materialised was thought to be a reaction to the scores of shorts closing out and subsequent expectation of renewed selling were foiled when buyers sustained their good run at higher prices.

These kind of price movements haven't been isolated to aluminum only but seen throughout the commodities market where the bulk of positive returns have been recorded thus far in the year.  

Alcoa’s (other) earnings surprise: metal production outperforms https://t.co/TIoRNAMYhx

— BN Commodities (@BNCommodities) July 12, 2016

Yet I'm of the belief that we cannot find optimism in the earnings of one company because some forget the disconnect that occurred between mining stocks and the rest when commodities suffered severely. The realignment of correlation hasn't merged as once was and in saying it would be ill-considered to erroneously believe the good health of the world economy just by judging the outlook of the commodities sector.

Brexit, European banking crisis and the situation evolving out of negative interest rate policy all contribute to a bleak foresight for markets given the length of time these news items spend bothering investors and traders alike.

These events have all taken such a toll on the global economy that they'll certainly weigh on activity in the future. How are we to rely upon on form of data to decipher the sentiment of an entire stock market, its simply impossible.

Earnings season is far from over and the true feeling will only be known once the last company has reported, until then we can't take for granted the frailty of situation.

Earnings season is here. Look who reports. Citi, Wells Fargo & more: https://t.co/MjHsStEqRH$C $WFC pic.twitter.com/07jZUCEWUg

— StockTwits (@StockTwits) July 11, 2016