The market has been thrown for a loop this week, but the worst might be yet to come. Companies began announcing their first-quarter earnings Tuesday, and expectations are pretty pessimistic, with some analysts predicting the weakest year-on-year growth since the beginning of the financial crisis.


However, as Alphaville notes, the Royal Bank of Canada points out that the trend also “ represents a double-edged sword: on the one hand, it would reflect a more self-sustaining economic recovery; on the other, it could dampen expectations of future earnings growth and translate into lower valuation multiples”—ultimately dragging down business activity and the broader economy.