After more than a year of back-to-back quarters of earnings declines, Jack Caffrey of JPMorgan Private Bank says the picture is "finally turning higher" and that has him ringing the register on stocks.
As of Thursday's close, 23 percent of S&P 500 firms reported, with 79 percent of companies coming in above estimates, according to Thomson Reuters. If all remaining companies were to report earnings in line with analyst predictions, EPS would be up 1.1 percent from the same time last year, a reversal from the 0.5 percent drop that was expected at the beginning of this month.
For Caffrey, the markets will soon reap the benefits of earnings momentum, especially given that many of the sectors that had previously struggled during earnings are finally starting to look up.
"[The sectors struggling during earnings had] been the energy sector, the industrials and the materials sectors," Caffrey said Thursday on CNBC's "Futures Now." "Those sectors are starting to find some strength, some support and [some] global growth environment."
But as much as Caffrey believes that earnings for the energy sector will be better this time around, some of the sector's biggest names aren't set to report earnings until next week with Chevron and ExxonMobil in the lineup. Plus, the sector's performance has Caffrey still encouraging investors to approach it with caution.
"[Energy is] one of the best performing sectors year to date. It's also had the worst earnings year to date," he said. "It speaks to a market willing to look through the next three, six, maybe even 12 months in terms of energy. The fact that it's rallied so much as both crude and stocks of late, I think speaks to some increased enthusiasm, but I wouldn't hang my entire market call on a 7 percent sector in the market."
Caffrey believes that the market could still move up another 3 to 4 percent.