Call it the pancake effect.
With the first half of S&P 500 companies having reported second-quarter earnings, profits are now slated to rise by just 0.8 percent compared with the second quarter of 2014, according to Thomson Reuters. That's a blended number that combines the earnings that have already reported with analyst expectation for those companies yet to report. (For reference, FactSet's blended number currently calls for a second-quarter earnings decline of 1.2 percent.)
That is significantly better than the 3 percent earnings decline that was expected when earnings season began. But the question remains: Is this nearly flat growth good enough to support a stock market that has risen more than 7 percent since the end of Q2 last year?
Some are skeptical, especially given the prospect that the Federal Reserve may be preparing to raise its key federal funds rate target this year.
"There are a lot of companies that are struggling, so overall we're heading to a rate increase, but underlying economic strength within earnings isn't quite there where it should be," said Larry McDonald, head of U.S. strategy with Societe Generale.
However, it is important to factor the major drag of energy earnings into the overall growth numbers. Thanks to the plunge in oil prices, S&P 500 energy company earnings are slated to fall by about 50 percent, dragging down the overall growth number by several percentage points.
When energy is excluded, earnings growth looks "pretty good, all things considered, as this is not the usual economic recovery into economic expansion," Oppenheimer chief market strategist John Stoltzfus wrote to CNBC.
And since "ultimately cheaper oil prices will be good for the U.S. economy (business, government and consumers)," Stoltzfus doesn't worry about the signal that flat earnings might otherwise be sending.