With the global economy showing all the balance and poise of a drunk monkey riding a unicycle along a greased-up tightrope, the US earnings season has never been more closely scrutinised, as the effects of the results from the States seep all the way down to New Zealand’s corner of the world.

The season, which unofficially kicked off on this week, had an immediate impact on a local level, with the New Zealand dollar falling back a cent as currency investors scuttled back to safe-haven money.

A five-week rally on Wall Street came to an abrupt halt last week as that caution over the season reached its peak, with other global markets following the lead of the US and also pulling back.

Like any other earnings or results season, surprise remains the name of the game, with both good and bad news having an impact as some of the world’s largest companies reveal profits and losses that put many GDPs in their shadows.

But this earnings season is coming under closer scrutiny, as each surprise has a massive impact that bounces around the world, with investors looking for any reason or excuse to dive for cover.

The surprises started early, as Goldman Sachs pulled a $1.7 billion quarterly profit out of its hat and promised to pay back the federal government funds received under the bank rescue plan, by raising $5 billion in a public offering.

This result eased some fears that the banks would find it difficult to recover in the current climate.

JP Morgan Chase revealed overnight its first quarter profit has dropped by 10%, mainly due to a alarming growth in reserves for consumer loan losses, although its investment banking business saw gains from robust debt trading and underwriting gains.

Citigroup is due to reveal its results at the end of the week. Along with JP Morgan Chase, the bank reported gains for January and February, but December was a bad month for most.

Wells Fargo, one of the biggest home lenders in the States, couldn’t wait for the season to begin and last week proudly forecast a US$3 billion profit for the first quarter.

While AIG is still a long, long way from crawling out of the hole it dug for itself, it can also take some comfort in the fact that it can’t get much worse and is unlikely to see a repeat of its massive fourth quarter losses.

On the IT front, Google saw its first quarter net income increase from US$1.3 billion last year to $1.4 billion, while Nokia saw its sales of mobile phones dip below 100 million units, as revenue fell 27% and profit plummeted to €4 million from €1.2 billion a year ago.

Optimism was also dented by Intel's results, with its profit down 55% to $647 million.

But too much optimism could also be harmful, with many analysts predicting that a sustained pick-up in earnings won’t begin until the first quarter of 2010 and expressing concerns that if current hopes of an earlier recovery prove false, the extra disappointment will lead to new market lows.

Companies with local interests will also be keeping an eye on how their bigger competitors are doing.

Rio Tinto may be a little more reluctant to fire its Tiwai Point smelter back into full production when US aluminium giant Alcoa kicked off the season with a US$470 million loss and this decision could have further knock-on effects on the New Zealand power grid.

In the computer market, Intel has revealed it believes PC sales bottomed out during the first quarter as its income fell from $1.4 billion in the same period last year to $647 million, while revenue fell from $9.7 billion to $7.1 billion.

While forecasting the future of the world economy has always been difficult, there is still general agreement that any global recovery will take a while and could still be a long time coming.

With the inevitability of more shocks and surprises in the current months, the shudders from the impact will continue to be felt in New Zealand.

But despite this, the global economy is still chugging along, so maybe the drunk monkey’s balancing act isn’t so bad after all as he manages to stay on the tightrope.