Will earnings tank stocks?

Will earnings tank stocks?

We're a week into earnings season. And, we're a week into the federal government shutdown.

Some big names are reporting this week, including former Dow-component Alcoa, Yum! Brands, JP Morgan Chase, and Wells Fargo. According to Thomson Reuters, the average growth rate for companies in the S&P 500 index this quarter versus last year is expected to be 4.5%. On the top line, average revenues are expected to be 3.0% higher than last year.

(Watch: Cramer: Is stock market about to get ugly?)

But even if the average earnings for companies in the S&P 500 come in as expected, this isn't an average time for the markets. The federal government has been shut down since October 1 and 800,000 of its workers have been furloughed.

Since the start of the federal government shutdown, the benchmark S&P 500 Index just about flat. It's slightly better for the small-cap Russell 2000 index, which is up by less than half a percent. The Dow Jones Transportation index is also flat.

As noted by John Stephenson, portfolio manager at First Asset Investment Management, there were 17 federal government shutdowns since 1976, averaging 8 days in length. "In the ten most-recent episodes, the S&P 500 reclaimed all of its losses and more within two months," Stephenson says.

The markets have doing quite nicely in 2013, even with the shutdown. The S&P 500 is still up 17.7% this year. Other indices are also having a great run: The Dow Jones Industrial Average has a year-to-date return of more than 14% and the NASDAQ Composite index is higher by 25% since January.

(Watch: Washington baits, Wall St. doesn't bite on panic)

But, as political leaders in Washington continue to wrangle over the budget and the future of "Obamacare" – and US Treasury Secretary Jack Lew warns the government will be unable to pay its bills by October 17 if no deal is achieved – is it time to get out of stocks or is there more room on the upside this year? And how will earnings affect everything?

Looking at the S&P 500 from the fundamentals is Gina Sanchez, founder of Chantico Global. Checking the charts on the index is Jeff Tomasulo, managing partner at Belpointe's Alternative Investment Group.

Given the uncertainty in Washington and as earnings start coming in, are you better safe than sorry when it comes to stocks? Watch the video to see what the fundamentals and technicals have to say about that.

More from Talking Numbers:
These are the most hated stocks on Wall Street

Buffett: Government showing 'extreme idiocy'

Lebenthal: What a government shutdown means for municipal bonds

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