This earnings season will pack big surprises, and that may be good, according to one market bull

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Expect the unexpected as earnings season picks up speed this week, says Edward Yardeni, president and founder of Yardeni Research.

Earnings season picks up speed this week with Netflix, Goldman Sachs and IBM among the heavyweights stepping up to the plate.

"Wall Street analysts are predicting a 2% drop on a year-over-year basis in earnings for the first quarter and I wouldn't be surprised if it turns out to be the right number, just the wrong sign. It could be plus 2%," said Yardeni. The financials have already proven that upside surprises can be a running theme this reporting season, says Yardeni.

J.P. Morgan and Wells Fargo beat estimates on Friday even after the yield curve between the 3-month and 10-year Treasury notes inverted at the end of the March quarter. A flat, or inverted, yield curve puts pressure on banks' profit margins because it limits their ability to borrow cheap and provide longer-term loans at a higher interest rate.

 

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