Market researcher James Bianco believes Wall Street is teetering closer to an earnings recession.
Unless the Federal Reserve intervenes with a bigger-than-expected 50 basis point cut, he's worried that year-over-year earnings growth rates for the second and third quarters will go even lower.
"The estimates for the third quarter are somewhere just below zero. This is not earnings growth. This is just struggling to stay at zero," the Bianco Research president told CNBC's "Trading Nation" on Wednesday.
Bianco is building his case on an ominous trend in the current quarter's S&P 500 earnings expectations.
"The estimates have just gone negative in the last week or so," said Bianco. "They're only down a couple of 10ths, but they are negative. And, they've been in a downtrend of several months."
Bianco, who calls himself a "market guy," has been firmly in the rate-cut camp. He has been calling for the Fed to slash rates four times over the next 12 months.
He is concerned the longer the 10-year and 3-month U.S. Treasury yields are inverted, corporate profits could sustain more damage.
"It's telling you that money is too tight for four or five months," Bianco said. "Better to go 50 [basis point cut] now and you can raise rates later."