Trading Nation

The good news about this earnings season

Why this week's earnings reports are a big deal for the market

As a huge share of America's biggest companies report their results, it's looking to be an especially temperate earnings season.

This is the biggest week for earnings, with about a third of the companies in the set to report. Collectively, S&P 500 companies are expected to show year-over-year earnings growth of 7.6 percent for the second quarter, according to S&P Global. While that may sound good, it is actually the lowest expected growth for any quarter in 2016.

"Part of that is because we have negative expected growth for consumer discretionary, industrials and utilities," Erin Gibbs, portfolio manager at S&P Global, said Tuesday on CNBC's "Trading Nation." "But so far, so many companies are beating their estimates and beating expectations, it looks like just utilities will end up in the red."

Indeed, three-quarters of companies are beating their estimates, which is above the average rate, Gibbs pointed out.

Going forward, the key factor will be tech.

"Information technology is expecting over 16 percent earnings growth for Q2," she said. "It is supposed to be one of its best quarters of the year. We want to see those companies meet those expectations, if not beat."

Facebook is set to report after Wednesday's bell, while Amazon is due to report on Thursday afternoon.