First-quarter earnings could show a lot of better-than-expected results. 

There's a caveat, but here's the logic:

Earnings Beat?

"The low bar is likely to be cleared," wrote LPL Financial's chief investment officer John Lynch, in reference to expected S&P 500 earnings for the first quarter of 2019, in a note out Friday.

Lynch noted that S&P 500 energy companies are expected to see an earnings decline of 22% in the quarter, according to FactSet, while tech companies on the index are expected to see a 10% decline and materials a 12% decline.

But the estimates for these highly cyclical sectors are overly pessimistic, Lynch wrote. They're a result of "the headwinds of weaker global growth and trade uncertainty, which led to above-average cuts to estimates." 

"The 7% cut to first quarter estimates since the start of the year, [which were] the biggest cut since the first quarter of 2016, may have put the bar too low," Lynch wrote. 

Importantly, stocks have already soared to start the year, with the S&P 500 up almost 16% year-to-date, and the average forward earnings multiple on the index hitting 17.32, above the historical average of 16.

More Oil M&A?

Anadarko (APC)  receiving a $33 billion cash-and-stock bid from Chevron (CVX - Get Report) , sending its shares up 32% to $61.69 apiece. But since Occidental (OXY - Get Report) reportedly also made a bid, this could indicate that other companies in the oil sector might be in play, RealMoney's Kevin Curran wrote. Potential target companies include Apache (APA - Get Report) , Concho (CXO - Get Report) , (XEC - Get Report) , and Pioneer (PXD - Get Report) . 

Related:  Who Might the Oil Majors Acquire Next After Chevron's Anadarko Deal?
 
(By the way, Curran called the Chevron-Anadarko deal so he's worth listening to). 
 
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