Is Wall Street in for a pleasant surprise during this quarterly earnings season? I recently sat down with Rhonda Schaffler, anchor of TheStreet TV, to discuss earnings expectations and the economy.

Once again, last week’s economic news was relatively positive.

Although the industrial sector continued to struggle, manufacturing showed further signs of stabilization, and the service sector actually improved. Net exports continued to be a weak point, driven by economic weakness abroad. (The Federal Reserve highlighted this as the major source of risk in the March meeting minutes.) Nonetheless, the fundamentals continued to show slow improvement, suggesting that the economy is moving out of the slowdown of the past two quarters.

Yesterday afternoon, I was on CNBC's Closing Bell from the floor of the New York Stock Exchange, forecasting earnings to come and discussing current market conditions with hosts Bill Griffith and Kayla Tausche. 

We're heading into earnings season, when companies announce how much they made last quarter. This is when I start reviewing current market expectations and how they relate to the fundamentals.

Last week’s economic news was positive overall.

Consumers continued to save rather than spend, but signs of increasing confidence suggest that may change. U.S. business, on the other hand, signaled widely improving confidence, especially in the industrial and manufacturing sector. Finally, employment growth continues strong and is starting to attract discouraged workers back into the labor force even faster—a very encouraging development.

Despite all the signs of an economic slowdown in recent months, one thing has just kept going: the job market. Month after month, employers have kept hiring and kept expanding the demand for labor.

Janet Yellen made it very clear yesterday that, as far as she’s concerned, the trajectory for interest rates will be lower for longer. In a speech to the Economic Club of New York, Yellen said that she thinks the risks in the global economy justify continued low rates here in the U.S.

Last week’s economic news was discouraging, with weak headline numbers and generally weak details. Nonetheless, the data points more toward continued slow growth, not a collapse.

Two of the big economic stories—interest rates and the stock market—came together in the aftermath of the most recent Federal Reserve meeting. The Fed opted to keep rates where they are (not a surprise), but the statement and Janet Yellen’s press conference were unexpectedly dovish, suggesting that rates are likely to stay much lower than the Fed had previously indicated. The expectation dropped from four increases in 2016 to just two, which surprised and encouraged the stock market.

Last week’s news wasn’t particularly good, but neither was it particularly worrisome. Economic reports were mixed, with weak headline numbers supported by better details and trends.

Overall, growth remains slow and steady, despite the lingering slowdown from the end of last year.