Video Length:00:09:00

With Alcoa (AA - Analyst Report) set to report results after the close on Wednesday, the Q2 earnings season is expected to take the spotlight in the coming days. The reporting schedule really ramps up next week when more than 40 S&P 500 members are on deck to come out with quarterly results, including all the major banks and a number of key Technology players like Intel (INTC - Analyst Report) and Google (GOOGL - Analyst Report). 

Overall, the Finance sector is expected to do better than most other sectors, including the Technology sector, with total earnings for the sector expected to be up +2.6% from the same period last year. The outlook for the sector started improving during the quarter following the uptrend in treasury bond yields, though yields have lately reversed course as a result of the Greece inspired safe-haven trade. But beyond the yield backdrop, the Finance sector's earnings power has improved over the last couple of quarters, reflecting better cost controls, the improving housing sector momentum and gains on the capital market side. Earnings for the Technology sector are expected to be down -1.1% in Q2, with the growth rate dropping to -6.9% if Apple's (AAPL) estimated strong numbers are excluded from the sector. 

Beyond Finance and Technology, there is potential for positive surprises from the Energy and Transportation sectors. For the Energy sector, total earnings are expected to be down -63.7% from the same period last year.

Unlike other sectors, estimates for the Energy sector didn't fall that much since the start of the quarter. But given the improved commodity-price backdrop during the period, estimates seem to be on the low side. Stock prices for the Transportation sector have been under pressure lately, largely reflecting the regulatory scrutiny of the airline industry and tough commodity demand backdrop for the railroads. But the sector's earnings power remains intact, with the airlines and truckers likely surprising to the upside. 

All in all, total earnings for the S&P 500 index are expected to be down -6.8% in Q2 from the same period last year on -6.4% lower revenues. But excluding the Energy sector drag, total earnings for the index would be essentially flat.

Get the latest research report on AA - FREE

Get the latest research report on GOOGL - FREE

Get the latest research report on INTC - FREE

Get the latest research report on SPY - FREE