The economic calendar is light next week and Federal Reserve officials are in a quiet period before their next meeting in early May. But then there are corporate earnings reports, which will overshadow everything else, market-wise. More than one third (35%) of the S & P 500 reports earnings next week — including megacaps Microsoft, Alphabet, Meta Platforms and Amazon — versus less than 12% in the week just ended and only 2% last week. Communication Services stocks have soared 20% in 2023 (thank you Meta, +77% YTD). Information technology names are ahead 19% (Alphabet and Microsoft, both +19%). Consumer discretionary stocks have climbed 14% (Amazon + 27%). “We do think that the tech companies are going to meet expectations,” Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina said. He’s not the only sanguine one. “There’s enough of a balance between well run companies that tend to do well agnostic of economic activity, manage their expenses coming into this quarter that likely, we’re gonna have more good news, than bad news. But the bad news likely ushers with it more punishment than usual because of how well these stocks have performed over the course of the last six weeks,” said Art Hogan, chief market strategist at B. Riley Wealth Management. What worries Zaccarelli is the outlook for the rest of the year. “Our concern is that valuations are already so high, I think a lot is already in the price. I think there’s a lot of room for disappointment, whether that’s in not beating expectations enough or more likely on forward guidance.” Technology managements are likely to “indicate that the future is muddled, it’s uncertain, and that they’re taking steps to prepare for potential economic weakness to come…so much good news is already priced in, that it’s going to be really hard to surprise to the upside at this point,” Zaccarelli said. EPS cuts ahead Which only adds to a bear case that, entering May, risk in the market is rising. “The history of negative EPS revision cycles comparable to the one we’re seeing this cycle suggest more downside is in the cards for both share prices and [earnings] estimates,” Venu Krishna, head of U.S. equity strategy at Barclays Capital wrote this week. Barclays studied four other periods since the mid-1980s when earnings estimates for the S & P 500 for the following 12 months have fallen by more than 5%, and when the Conference Board’s Index of Leading Economic Indicators is as weak as it is today. Every other time, earnings estimates fell about 25%, leaving Krishna this time “incrementally confident that EPS cuts are far from done.” So far this quarter, S & P 500 earnings are running 4.7% below the same period a year ago, Refinitiv data shows. With the outlook for the rest of 2023 so uncertain, the ghost of recession future is hanging over the stock market, especially since lower Treasury market yields, the Federal Reserve staff, leading economic indicators, a slowdown in bank lending, and the past week’s Philadelphia Fed and jobless claims surveys are all conspiring to point to a contraction. Sell in May? Even analysts who don’t foresee a recession aren’t optimistic about the immediate outlook for stocks. “My bullish vibrations are wearing thin short term,” said Jeffrey Hirsch, editor in chief of the Stock Trader’s Almanac . “I am not expecting the market to take out the October low or the economy to enter a recession,” but the prospects during what are typically the worst six months of the year (from May through October) “are dim,” he said. After all, the S & P 500 is up 7.7% so far in 2023 and, remarkably, more than 90% of that return has occurred since Silicon Valley and Signature banks failed in mid-March, less than six weeks ago. Investors aren’t only rattled by Federal Reserve monetary policy, the pace of inflation and an economic slowdown, Hirsch said. There’s also the looming battle over the Federal debt ceiling. Earlier this week, economists at Goldman Sachs led by Jan Hatzius wrote that “weak tax collections so far in April suggest an increased probability that the debt limit deadline will be reached in the first half of June,” rather than early August, which the investment bank had previously projected. This debt ceiling debate is eerily like the last one in 2011, Hirsch said, which from a seasonal point of view, was also the year before a presidential election with Democrats in control of the White House and the Senate and Republicans the House of Representatives. Back then, the S & P 500 fell 19.4% from its April high to a low on October 3. Meanwhile, next week is the last full trading week before Wall Street’s old adage to “sell in May and go away” takes hold. At some point soon, that “will likely be the prudent course of action,” Hirsch said. Week ahead calendar Monday 10:30 a.m. ET: Dallas Fed manufacturing survey (April) Earnings: Coca-Cola, Whirlpool, First Republic, Packaging Corp. of America Tuesday 8:30 a.m. ET: Philadelphia Fed service sector survey (April) 9:00 a.m. ET: FHFA Home Price index (February); S & P Case-Shiller home price indexes (February) 10:00 a.m. ET: Conference Board consumer confidence survey (April); New home sales (March); Richmond Fed index (April) Earnings: Alphabet, Microsoft, Visa, Paccar, PepsiCo, Biogen, General Electric, Northern Trust, General Motors, 3M, McDonalds, Boston Properties Wednesday 8:30 a.m. ET: Durable goods orders (March); Wholesale inventories (March) Earnings: Meta Platforms, Norfolk Southern, Hilton Hotels, Boeing, Ebay, KLA-Tencor, Pioneer Natural Thursday 8:30 a.m. ET: Jobless claims (week ended April 22); Q1 GDP (first preliminary) 10:00 a.m. ET: Pending home sales (March) 11:00 a.m. ET: Kansas City Fed manufacturing index (April) Earnings: Amazon, Intel, Amgen, Eli Lilly, Merck, Bristol-Byers Squibb, AbbVie, Hershey, Caterpillar, Honeywell, Mastercard Friday 8:30 a.m. ET Personal income (March); Consumer spending (March); Core PCE (March) 9:45 a.m. ET: Chicago (PMI) April Earnings: Chevron, ExxonMobil, Colgate-Palmolive –CNBC’s Samantha Subin, Alexander Harring, Robert Hum and Michael Bloom contributed to this report.