Is the economy actually picking up steam? Investors will get another indication this week, when cyclical giants like Caterpillar and Ford report earnings
"I'm looking at CAT, I'm looking at Ford, I'm looking at Microsoft. And I'm taking them all together and kind of putting them in the category of an economic datapoint from a macroeconomic standpoint," said Jim Iuorio of TJM Institutional Services.
He expects that the reports will give investors another reason to be optimistic.
"I think that it's going to be good, based on the fact that most of the numbers we've seen over the last couple of weeks have been pretty good," Iuorio said.
So far, earnings season has brought decent news. 65 percent of the S&P 500 companies that have reported have beaten earning per share estimates — which just slightly below the 71 percent average. On the revenue side, 51 percent of reporting companies have beaten.
For Iuorio, the worst fears about earnings season have successfully been assuaged, and the most important question now is what earnings tell us about the strength of the underlying economy.
"There is a group of companies that you select that can indeed reveal something about the economy as a whole," said Eli Lustgarten, senior research analyst at Longbow Research.
Among the companies whose results can be telling if taken together are Ford and Caterpillar, the analyst told CNBC.com. Ford reports earnings on Friday before the bell, and Caterpillar is set to report on Thursday before the bell.
Other major companies reporting this week include McDonald's on Tuesday, Apple on Wednesday, and Microsoft on Thursday.
Taking a defensive view, Rich Ilczyszyn of iiTrader says he plans on buying portfolio protection in the way of the CBOE Volatility Index.
"Coming in on Monday morning, I'm buying the dip in the VIX, because we do have all these big names, and I want to protect my portfolio," Ilczyszyn said. "Once we get through next week, then I'll make a more informed decision about whether I'm bullish or bearish on the equity market."
—By CNBC's Alex Rosenberg.
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