Tuesday's Market Minute: Earnings Season Clocks In

A long-awaited earnings season kicks off this morning as many of the big banks start to release their quarterly reports. Right now, earnings expectations are for an overall decline of 3%-4%, with Tech, Materials, and Energy dragging the rest down. However, we've seen company after company revising their outlook down throughout the first two quarters of the year, leaving room for earnings to still beat against these much-lower estimates.

Trade concerns and global slowing are headwinds to be sure, but U.S. recession chances are still low, rates are low, and the consumer, the stalwart of the economy, is still going strong. The question is, do earnings beats against smaller estimates really signal strength? Or are they masking a significant slowdown? Bank stocks are often considered a bellwether for the rest of the season. Keep an eye on charge-offs and loan amounts for a snapshot of consumer health, and an indication of what comes next.

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