U.S. stocks have benefited from three "crutches" in recent years, and investors need to focus on whether one of those crutches—earnings—will now support or create drag on equities, analyst Peter Boockvar said Monday.
The Federal Reserve removed one of those crutches last year when it ended its quantitative easing program, but the last support, low rates, will remain in place for some time, the Lindsey Group's chief market analyst said. Earnings are the big near-term variable now.
"Earnings now are looking more flattish year over year, so I think that's the main driver over the next three weeks," Boockvar said on CNBC's "Squawk Box." "That earnings crutch is beginning to change, and that's what investors need to be focused on."
The earnings picture has been mixed thus far. Of the 59 S&P 500 companies that had reported by last week, 75 percent had topped profit expectations, above the 70 percent average for the last four quarters, according to Thomson Reuters. However, only 45 percent of companies beat revenues estimates, compared with 58 percent in the last four quarters.
Investors will get a more complete picture of the first quarter this week as more than a quarter of S&P 500 companies report earnings in the coming days.
Asked whether a weak first quarter will portend a bad year for stock investors, Boockvar said he expects some bounce back in the second quarter, but economic growth may remain unimpressive.
"We're still stuck in this mediocrity of 2 to 2.5-percent-type GDP growth that we can't find a way to get out of, and that's predominantly because productivity is so sluggish," he said.
Investors are questioning how stock prices can rise as they perceive the U.S. economy is weakening, earnings may have entered a recession in the first quarter, and equities are already looking expensive, Dan Greenhaus, chief global strategist at BTIG, told "Squawk Box."
"When you have situation where stocks are fairly highly priced, earnings momentum has slowed, central bank policy has shifted from accommodative to potentially less accommodative … you have an environment where you've shifted from favorable for stock prices to less favorable for stock prices," he said.
While the U.S. economy hit a soft spot in the first quarter, the weakness in earnings is primarily due to volatility in oil markets and the strengthening of the U.S. dollar, said James Liu, executive director and global market strategist at JPMorgan Funds.
"We think most of those things will stabilize by the second half of this year," he told "Squawk Box." "Forecasts right now suggest that full year 2015 probably looks to be about 5 percent earnings growth, which is low, and it means maybe you get 5 to 7 percent return."
Liu acknowledged the revenue misses, but said the story of the cycle has been the strength of margins, and that will probably be what drives earnings forward for the next couple of quarters.
In the energy sector, Liu is watching to see that capital expenditure numbers come down, a sign that oil and gas firms are doing the right thing to stabilize their businesses as crude prices appear set to remain in the $50 to $60 range.
Earnings will give investors the chance to see exactly how the strengthening dollar affected companies, noting that it is notoriously difficult to measure that effect.
A strengthening dollar makes U.S. goods more expensive in foreign markets and dilutes the value of earnings when American companies bring profits back home.
Greenhaus also stressed the importance of the dollar impact, particularly on industrial companies. He noted that Honeywell significantly reduced its full-year guidance as a result of foreign exchange headwinds.
"Industrials this week are going to hit on that theme, and I think for a lot of investors that I'm talking to at least, that's going to be crucial. How large is that impact?" he said.