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Earnings: More To Come, But Better News?

I know what you're thinking...man, when is earnings season going to end? We're only through one-fourth of the S&P 500 earnings, and it seems like it's been going on forever.

It's a little bit of an illusion. The problem is that, as Nick Raich points out, the first part of earnings season has been populated largely with financials and consumer discretionary stocks, where there have been some BIG earnings misses.

In the coming weeks, we'll be getting more industrials, more energy & materials companies reporting. There, we should start hearing better news. I hope. Please.

Actually, I'm a little worried about that too. Look at Union Pacific today. These guys killed their earnings--beat big time. Stock's near a new high. So what does management say? "Near-term we remain cautious on the economy and see challenges from rapidly increasing diesel fuel prices," CEO Jim Young said.

Here, I fear, is the template for commentary for the rest of the quarter: reducing expectations the name of the game. The diesel fuel thing is a problem, because we are hearing other companies complain about higher costs. Domino's Pizza and Hershey's both complained that higher costs were squeezing their margins.

Great. Cautious on the economy. Higher costs squeezing margins. Somebody stop this, because if it keeps up it leads to only one conclusion: lower Q4 earnings. No wonder I'm in a bad mood.

Take heart, Pisani (bulls keep yelling at me): despite this hand-wringing, the Dow and the S&P are only 3% from the historic high they hit about a week ago. The market is saying it will all work out.

Questions? Comments? tradertalk@cnbc.com

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