The outlook for corporate profits is getting worse, and it's not just about the battered energy sector.
Banks, looked to as a bright spot for the upcoming earnings season, might not live up to expectations, according to an analysis from Goldman Sachs.
The firm's analysts have cut profit outlooks for three of the top four money center banks on Wall Street, representing about a 6 percent reduction overall and serving as a sobering sign that the earnings recovery after the financial crisis appears to be running out of steam.
"We believe lackluster 1Q earnings combined with pressure on out year consensus estimates from adjusting for a flatter yield curve sets up a challenging earnings season for money centers," analyst Richard Ramsden and others wrote in a research note.
The warning comes as the Street is preparing for a possible "earnings recession," or consecutive quarters of negative growth. S&P 500 profits collectively are predicted to decline nearly 3 percent in the first quarter, followed by another drop of about 1.8 percent in the second quarter.