Uh oh! This hasn't happened since financial crisis

Published Mon, Apr 20 20158:04 AM EDTUpdated Mon, Apr 20 20158:47 AM EDT

It's still early in this earnings reporting season, but a worrisome trend is unfolding, and if it continues, it could undermine the bull market. Just 42 percent of S & P 500 companies that have reported first-quarter results have topped consensus revenue estimates, according to Bespoke Investment Group. The last time the top-line beat rate was this low was in the first quarter of 2009, when the economy was still in the throes of the financial crisis. Source: Bespoke Investment Group If fewer than half of companies can top low-ball revenue estimates from Wall Street, then this bull market is masking the deteriorating effects of a weaker-than-expected economy and a surging U.S. dollar. The five-year average sales-beat rate is 60 percent. And as company after company misses revenue expectations, it begins to become clear that the overall S & P 500 in 2015, the sixth year of the bull market, will post a sales decline. Analysts are now projecting revenue to decline by 1.1 percent this year for the market, according to FactSet. Will investors wake up and realize that the bull run doesn't have any organic growth behind it? "Coming into earnings season, companies warned us that revenues would be weak due to dollar strength and weather issues, but so far it looks like analysts didn't get the message," the Bespoke report said. The money play: If you want to follow the revenue growth, look to the health-care sector, which can be traded through the purchase of the Health Care Select Sector SPDR Fund. Taking into account the companies that have already reported and the estimates for those that are left, the sector will post 9.4 percent sales growth in the first quarter. What's more telling is that all S & P 500 health-care companies that have reported have topped sales expectations, said FactSet. Technology stocks, which can be purchased through the Technology Select Sector SPDR Fund , are expected to post 5 percent revenue growth in the first quarter. Financials is the next best sector in terms of revenue growth with the group expected to post a 4.5 percent increase in the first quarter, according to FactSet. On the bearish side, energy sector revenues will decline by a whopping 40 percent in the first quarter, and materials companies will post a 6.3 percent decrease, according to FactSet. Read More The $1 trillion force lifting this bull market The market doesn't seem worried with this trend, and appears content with companies using buybacks financed by low interest rates to shrink share count and keep earnings per share figures slightly afloat. Investors may also believe the drop in oil prices and the fall in energy sector revenues will be temporary. From the Bespoke report: "Investors haven't seemed to care at all about the weakness in revenues. The average stock that has reported this season has gained more than 1 percent on its earnings reaction day, and even the companies that have missed revenues have averaged a one day gain of 0.68 percent on their earnings reaction days." But the market may be starting to realize these top-line troubles. As earnings reports ramped up last week, the overall stock market declined, with the S & P 500 down 1 percent for the week. This week will be the key test as it will bring the most results of the first quarter reporting season. If more companies say organic growth isn't quite there, the market reaction could be negative once again.

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It's still early in this earnings reporting season, but a worrisome trend is unfolding, and if it continues, it could undermine the bull market.