NEW YORK (TheStreet) -- A strong U.S. dollar and weak oil prices have put a dent in second-quarter earnings so far, J.P. Morgan Asset Management Strategist David Lebovitz said, and big tech earnings will be no exception when they report.
When the rest of the S&P 500 reports -- including major technology firms like Facebook (FB) - Get Report and Google (GOOG) - Get Report(GOOGL) - Get Report , which report after market close today and tomorrow -- expect them to show negative year-over-year earnings growth mainly because of those factors, Lebovitz said.
He anticipates that as we get to the third and fourth quarter, the effects of lower oil and the dollar will "generally" dissipate. Nonetheless, the strategist said it's too soon to call a bottom in oil.
"When you look at revenues, we're seeing a little more disappointing news, and that's directly related to a stronger dollar and lower oil prices," he said.
Lebovitz is maintaining a tilt toward cyclical sectors like technology and the financials -- sectors that should benefit from an improving economy and a rising stock market as he waits for improved revenue in the latter half of the year.
Although we've seen some stabilization in oil prices, it's important to watch production and consumption figures, as well as oil rig count, to get a sense of where oil may be headed next.
Commodities are driven by supply and demand, so that's what Lebovitz is watching to gauge the next move in oil markets.
For now, companies are beating analysts' lowered earnings expectations this season, but that's not an impressive feat given the lowered bar.