The revenue recession is real, and the trend is not good

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Earnings season is in full swing, and once again there are considerable worries about what some are calling a "revenue recession."

It is a problem, but there are several obvious reasons for it, which may reverse in the second half of the year.

Second quarter earnings for the S&P 500 are expected to be down 3.8 percent, according to Factset. However, those numbers typically rise 3 to 4 percentage points as reports come in, so earnings are likely to be flat for the quarter.

We are already seeing earnings estimates rising, even with less than 10 percent of the S&P 500 reporting. We've seen recent beats from Bank of America, Netflix, Intel and Johnson & Johnson.

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Flat earnings growth is still not great—it's roughly what we saw last quarter—but revenues are expected to be down 4.2 percent, and that is not likely to change too much.

Why no revenue growth? Partly, it's because companies have not been able to raise prices. There's also been fairly slack demand as economic growth has been tepid.

But the main pressure on S&P earnings this year is coming from the historic collapse in oil prices and the pressure on earnings and revenues for energy companies.