The good news on 2019 earnings is that a lot of bad news is already priced into the market, as seen by the very modest drop of 1.5 percent in Samsung shares on Tuesday after terrible guidance.
The flip side is a lot of damage has already been done, and other companies will be similarly cautious. It's not clear how much negative news the markets can handle before again turning down.
For some bears, like Mike Wilson from Morgan Stanley, the damage to the global economy has already been done: "I don't see how the earnings revision trajectory is going to turn positive," he said on CNBC on Tuesday.
Early fourth-quarter earnings reports — not surprisingly — are coming in above expectations, but investors have only one issue on their minds: 2019 guidance. Of the 18 companies that have reported fourth-quarter earnings, 94 percent have beaten expectations, but 67 percent have had their first-quarter earnings estimates cut by analysts after their reports. according to Nick Raich at Earnings Scout.
Most importantly, overall numbers for 2019 are declining: from 10 percent earnings growth for the S&P 500 in 2019 projected at the start of October to a lower 6.8 percent projection as of now.