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Traders Fret Thrill is Gone as Earnings Fail to Impress

Ford posts its first full-year profit in four years, Procter & Gamble earnings top estimates and President Obama last night failed to chide Wall Street as hard as was feared, yet there's a timid reaction in the markets today.

Traders are coming to the realization that corporate America presented their most exciting earnings reports first in this earnings season, from financials and technology, and Mr. Market has been distinctly unimpressed. The S&P 500 is off by more than 4 percent since Goldman Sachs blew through estimates, Intel raised its forecast for the full quarter and Apple wowed us with a strong report and a tablet to boot. More than 70 percent of the S&P 500 members that have reported 4th quarter results have beaten street estimates and Mr. Market does not seem to care. This does not bode well for the companies left, as the bar for share price success has therefore been raised even higher.

And looking at the companies left to report may put traders asleep. Microsoft reports tonight, but this software behemoth sitting on a mountain of cash trades more like a utility stock than its once hot tech predecessor. Next week we also get Exxon Mobil, Pfizer and Clorox to report. Cisco reports, but with most of tech earnings already out, CEO John Chambers may have to do back-flips on his widely-followed conference call to get this industry, now the worst performing in 2010, going again.

As most people remain distracted by politics and the iPad, what's got traders worries is the breakdown in the global growth story led by China. The breakdown in bellwethers such as Freeport McMoran, the largest U.S. copper producer, U.S. Steel , the country's largest producer of that product, and Caterpillar , the biggest maker of bulldozers in the world, amounts to a "shadow" bear market foreshadowing what could happen with the rest of stock, according to Guy Adami, managing director at Drakon Capital, Fast Money panelists and a former Goldman Sachs trader.

The latest survey of financial newsletter writers collected by research firm Investors Intelligence for more than 20 years seems to back Adami up. The weekly poll shows that more than a third of these sages are calling for a correction (a drop of 10 percent or more) in the S&P 500. This is the highest count for this group since November 1986. These newsletter writers obviously were not impressed by the iPad.

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