As Wall Street looks to hear from corporate America as the parade of fourth-quarter earnings gets underway, investors are on the lookout for the the effect of crude's decline on the S&P 500's collective bottom line.
"There's no question that declining oil prices are going to impact energy companies, materials and some industrials, or at least those active in the oil field," said Phil Orlando, chief equity market strategist at Federated Investors.
But all the hand-wringing about the negative effect of crude's drop on S&P 500 earnings comes from folks forgetting about the positive consequences on consumer spending, the strategist added.
"For every 1 penny decline at the pumps, that adds a billion annually to consumer discretionary spending," said Orlando, who calculates $157 billion in additional consumer discretionary spending in the past nine months, from April, when a gallon of unleaded sold for a national average of $3.70.
In a $17 trillion economy, the extra cash in consumer pockets should boost GDP by another 1 percent, he said.
Federated is forecasting the U.S. economy grew 3.6 percent in the fourth quarter.
"So the folks saying fourth-quarter earnings are going to be a disaster, we think they are smoking dope," Orlando said.
Alcoa kicked off the unofficial start to the fourth-quarter earnings season late Monday, with the aluminum producer delivering earnings and revenue that topped expectations.
"Alcoa has done a lot better since it was kicked out of the Dow," Randy Frederick, managing director of trading and derivatives at Charles Schwab, of the September 2013 roster change, which had Goldman Sachs, Visa and Nike replacing Alcoa, Bank of America and Hewlett-Packard on the index.