— Alex HarringThe early earnings season results have showed companies beating a "pretty low bar" and the weakening economic outlook makes the market look uncomfortably pricey, according to Tim Urbanowicz, head of research and investment strategy at Innovator ETFs.
To be sure, the chief U.S. equity strategist noted that stocks appear to be holding up well so far this earnings period, trading more in line with fundamentals than over the past several quarters. That's due in part to the fact that stocks have traded well heading into the period instead of selling off as in previous season.
"This week with earnings season activity ramping up across a broad array of sectors we expect investors' anticipation of the Federal Reserve's upcoming FOMC meeting in the first week of May to add to the day to day tone and volatility of the markets," said John Stoltzfus, the firm's chief investment strategist.
"Logic would suggest piling into defensive stocks, whose earnings are less impacted by an economic slowing, and guess what, investors are piling into defensive stocks," said Tavis McCourt, managing director of institutional equity strategy, in a note to clients Sunday.