U.S. corporate earnings have largely topped analysts' estimates over the first two weeks of the reporting season, according to data from Refinitiv, but slowing revenue growth suggests the fading impact of tax cuts, and the uncertainty surrounding trade talks with China, will clip the collective bottom line of U.S companies over the first half of this year. 

Fifty-five S&P 500 companies have reported quarterly earnings for far this year, with 76.4% topping analysts' profit estimates, well above the long-term average of 64%, according to Refinitiv I//B/E/S data, but down from the recent run-rate of 78%. Collective revenues, however, are coming in below both the recent and longer-term averages, with 58.2% of companies beating Wall Street forecasts. 

"The earnings season price action and our (Fund Manager Survey) suggests investors have become quite bearish and defensively positioned, which means this should have further to run," said Bank of America Merrill Lynch strategists in a recent note. "Nevertheless, we have to acknowledge that markets have already bounced significantly off of their lows and for this rally to continue investors need to become more comfortable about the outlook for global growth."

The S&P 500 has risen more than 12.1% since hitting its Christmas Eve trough of 2,351.10 points amid concern over a manufacturing slowdown in the U.S. economy, the prospect of further interest rate hikes from the Federal Reserve and the impact of the ongoing U.S.-China trade dispute.

However, with two of those three concerns dissipating, stocks have rebounded firmly even as estimates suggest a sharp year-on-year slowdown in earnings growth for the first three months of this year -- to 3%-- compared to the 26.6% rate recorded over the first three months of 2019 as the impact of $1.5 trillion in corporate tax reform kicked in. Current earnings growth estimates for the second quarter are pegged at 4.9%, down from 24.9% in 2018, and 3.8% for the third quarter, down from 28.4%.

S&P 500 revenues are expected to grow by 5.6% from the same period last year for the fourth quarter of 2018, according to Refinitiv estimates, with a collective topline of $2.9 trillion, and then expand by 6.4% from the first quarter of 2018 to $2.8 trillion for the first quarter of 2019.

BAML strategists argue the recent S&P 500 rally is a "marked contrast to the Q3 earnings season", with stocks like Samsung Electronics (SSNLF) and JPMorgan Chase (JPM) - Get Report sharply reversing initial declines even as earnings disappointed.

"That, we think, says a lot about how much is discounted in the price of many stocks. Our US strategists have also flagged that valuation dispersion in the S&P 500 is now at its highest since the global financial crisis," they wrote.

According to Refinitiv, the S&P 500 is trading at a 15.4 multiple to its 2019 earnings estimate, down from 16.3 last year and 20.0 for the whole of 2017.

Around 60 companies will report this week, including several top-tier names in the semiconductor sector, with Advanced Micro Devices Inc. (AMD) - Get Report , Texas Instruments Inc (TXN) - Get Report , Intel Corp. (INTC) - Get Report , Western Digital (WDC) - Get Report , ASML NV (ASML) - Get Report and STMicroelectronics (STM) - Get Report all set to update investors on quarterly profits between Tuesday and Friday.

Other blue chip reports expected this week include IBM (IBM) - Get Report , Johnson & Johnson (JNJ) - Get Report , Comcast Corp. (CMCSA) - Get Report , Ford Motor Co. (F) - Get Report , American Airlines (AAL) - Get Report and Starbucks (SBUX) - Get Report