Big Earnings Week Starts With Caterpillar Miss

Dow Jones Industrial Average component Caterpillar (CAT) reported results for the first-quarter that were every bit as dismal as most people expected. CAT earned $1.31 a share, or 9-cents less than estimates on the Street.

In a statement the company expressed optimism on domestic housing, but said a 50% reduction in mining related businesses and little to no inventory build going into summer planting season will hurt results. For 2013, Caterpillar lowered its forecasts for both earnings and revenue to the low-end of the previous range.

Yahoo! Finance senior columnist Michael Santoli joined Breakout to discuss whether or not weakness in Caterpillar's outlook bodes ill for the economy and markets as a whole. In the attached video Santoli says it's becoming obvious that no great global growth story is in the works, taking away a tailwind upon which companies such as CAT relied.

"Maybe this is the world we're in for the next few months," Santoli says. Pointing out that the iShares MSCI Global Emerging Market Index ETF (EEM) is down more than 6% in 2013, he suggests that this year, unlike last, investors are braced for weakness. "We've readjusted to this idea that we don't have any global boom going on."

At this point it's all but impossible to find anyone willing or able to make the case that a resumption of global growth is in the offing. In the coming week some 30% of the S&P 500 will be reporting earnings results and offering guidance. If that weren't enough, there's also the first estimate of Gross Domestic Product to be released on Friday morning.

So far stocks have weathered the storm on disappointing economic news. If we can say the same thing at the close on Friday, bulls will be able to declare a moral if not financial victory.