It’s been quite a quarter for US corporates, with the first three months of 2016 seeing some pretty turbulent trading in equities on Wall Street.

The S&P 500 has plotted a pretty classic V-shape recovery, with the index entering correction territory in the first six weeks as a 10.5% drop roiled markets before central bank fuel powered US stocks to trade marginally higher for the year by the end of the quarter. Financials and healthcare are the black sheep, with these two sectors down 5%.

But the rally in equity prices doesn’t look like it will be matched by corporate profits.

For all stocks on the S&P 500, earnings are set to decline by 8.5%, according to FactSet. That would be the fourth straight quarterly drop in earnings, the worst run for US large-caps since the height of the financial crisis during Q4 2008 to Q3 2009. On a per share basis, EPS is set to fall by 9.6% for Q1, from $29.13 to $26.32.

A stronger dollar and the crippling impact of cheap oil on energy companies have created a perfect storm for corporate earnings.

SocGen bear Albert Edwards reckons we’re in for a “gut wrenching slump” in whole economy profits, something he thinks signals a recession is around the corner.

Energy Drag

Standing out among the gloom is the energy sector, which is set to record its first loss as a sector since S&P started tracking the figures.

Oil’s collapse to a 14-year low during the quarter is the biggest factor. And despite a recovery in the back end of the period, Nymex crude finished the quarter down $10 from a year before.

Looking ahead, traders are eyeing what oil prices will do over the coming months as Opec  talks about a potential production freeze and US output starts to slow.

Low Bar

Are firms setting the bar too low? There is a long history of companies painting a doom-laden picture, only for results to beat expectations. This time, of the S&P 500 companies that FactSet said had reported EPS guidance for the first quarter, three times as many companies have issued negative guidance as posted a positive outlook.

And the omens are not great for Q2 either. “Looking at future quarters, analysts do not currently project earnings and revenue growth to return until Q3 2016,” said FactSet.

Key Earnings Releases for the week April 11th – April 15th

Aluminium producer
Alcoa may not be in the Dow Jones Industrial Average these days, but it traditionally kicks off earnings season proper on Monday. Having slumped 40% in the first three weeks of the year, the stock had recovered most of the losses by the end of Q1, lifted on the wave of rallying commodity prices.

JPMorgan Chase gets the ball rolling for the big financials on Wednesday, followed by Bank of America and Wells Fargo the day after. Citigroup rounds off the major releases on Friday.

Across the Atlantic, retail giant Tesco is the big earnings release for the FTSE 100 in the UK, with the supermarket set to report on Wednesday.