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NEW YORK (Reuters) – The upcoming earnings flavour haw not be the instance for investors to buy aggressively, because this year's winners already emit earnings optimism.

The first-quarter news period, which begins Monday with results from metal company Alcoa Inc (AA.N), follows threesome months of solidified gains that hit brought stocks nearby to two-and-half-year highs.

Some gains hit been in life of a brawny earnings season, particularly for the forcefulness and another cyclical sectors, analysts said, upbringing questions most whether this quarter's reports will be enough to ready the time uptrend intact.

Stocks hit been feat up "in life of earnings that are feat to be what the real consensus is basically expecting," said Ken Fisher, chairman and CEO of Woodside, California-based Fisher Investments, which manages $43 billion.

Some investors wager the rise in forcefulness and another stocks that goodness when the frugalness starts to meliorate as unsustainable and hit been fragment backwards positions.

"We conceive artefact inflation is belike nearby a extreme as is the welfare take in many deeper cyclicals" including the forcefulness sector, said blackamoor Galvin, managing director and lead portfolio manager at Columbia Management in Stamford, Connecticut, which has most $6.5 1000000000 in assets low management.

Overall, first-quarter earnings for S&P 500 companies are due to hit increased 11.4 proportionality from a assemblage earlier, but that's downbound slightly from a prognosticate of 13 proportionality on Apr 1, supported on composer Reuters data.

Strategists fear higher artefact costs could damp results for consumer-related companies as well as those in industries with heavy render costs such as transportation.

Profit margins are due to modify to 8.13 proportionality in the prototypal lodge from 8.41 proportionality in the fourth quarter, according to Charles Blood, grownup mart contriver at Brown Brothers Harriman.

The forcefulness facet farther surpassed another sectors in the prototypal quarter. The Standard & Poor's forcefulness facet finger (.GSPE) was up 16.3 proportionality in the quarter, compared with the coverall S&P's gain of 5.4 percent, and lubricator prices are at 2 1/2-year highs.

During the fourth-quarter news period, the S&P 500 (.SPX) gained most 3.6 percent.

Analyst revisions to earnings estimates aweigh of the news punctuation hold that analyse that Wall Street is anticipating brawny gains in the forcefulness sector.

Since January 1, the forcefulness facet has been revised up the most, with its due ontogeny evaluate for the lodge rising to 25.9 proportionality from 11.5 percent, according to composer Reuters data.

On the another end of the spectrum, the telecommunications facet has been revised downbound the most, dropping to -3.4 proportionality from 7.5 percent.

Besides Alcoa, crowning obloquy news next week are JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and Google Inc (GOOG.O).

Fisher, who sees the mart mostly insipid this year, said expectations won't be exceeded in the upcoming earnings punctuation as they were in time quarters.

"Some will shoot the lights out - the manifest $64,000 question is which ones," he said.

"If you like materials, you'd meliorate be certain which ones. The cushy life of meet purchase materials and riding it free, that's digit years older now."

Others agree that such of the earnings optimism is already in the market. That haw ordered up a impulsive kindred to the fourth lodge news period, when exclusive companies that farther surpassed expectations rose substantially after news results.

"People are very, rattling cagy most underweighting (the forcefulness sector) because if you were underweight that facet in the time couple of quarters, you underperformed," said Natalie Trunow, grownup vice chair and honcho investment tar of equities at Calvert Asset Management Company in Bethesda, Maryland. It manages most $14.8 1000000000 in assets.

"There is so such optimism around energy, I'm meet not sure that it's not already priced in, and likewise for materials," she said. The S&P materials facet (.GSPM) was up 4 proportionality in the prototypal quarter.

Some, however, are sticking with the trends that hit worked. Apostle Mendelsohn, honcho investment contriver at Windham Financial Services in Charlotte, Vermont, said he recently additional to his gold position. Gold prices hit been trading at all-time highs.

S&P 500 earnings reports hit been beating expectations in time quarters, with most 70 proportionality coming in aweigh of Wall Street profit views, compared with roughly 60 proportionality typically, composer Reuters accumulation showed.

(Reporting by Caroline Valetkevitch; Editing by saint Hay)

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