DataTrek's Nick Colas is questioning the better-than-expected earnings season.
With almost 80% of S&P 500 companies reporting quarterly numbers, he believes it's troubling analyst growth forecasts aren't reflecting a more benign earnings environment. It's an issue, Colas worries, Wall Street is largely ignoring.
"What's odd to me is that even as this good news comes through the system, analysts aren't really raising numbers for 2019 as a whole," he told CNBC's "Trading Nation " Friday. "You'd think if we were doing better than expected in Q1, we'd see numbers go up."
Based on FactSet data, Colas points out earnings growth forecasts were actually more optimistic earlier this year.
"It was actually higher a month ago, two months ago, three months ago, four months ago. So, we are actually still seeing a number of cuts even in the face of these stronger numbers," added Colas, who warned last month that the street could see its worst earnings season in three years.
"We definitely dodged a bullet with these Q1 numbers," he said.
Since earnings season began on April 12, the major indexes have been positive. The S&P 500 is up almost 2% while the tech-heavy Nasdaq, which closed at a record high on Friday, has gained about 3%. For the year, they're up 18% and 23%, respectively.
"Right now, analysts feel like they've really zeroed in on what earnings power is for the S&P this year," said Colas. "That kind of takes the earnings surprise thing off the table."
If wage growth increases to spur the consumer and the Federal Reserve cuts interest rates this year to push the yield curve lower, he predicts the historic stock market rally will be intact.
"That'll be the rocket fuel that really pushes this market higher," Colas said.