as the sp 500 index eked out gains in the first quarter analysts and dozens of companies grew more pessimistic about their earnings by almost the same percentage as higher prices and fissures in the banking system sharpened fears of a downturn as the weather front of firstquarter earnings reports approaches wall street analysts expect firstquarter pershare profit for companies in the sp 500 spx to fall 66 according to a report from factset released on friday that would be the biggest drop since the second quarter of 2020 when the pandemic’s toll on the economy was at its worst and sent earnings 318 lower analysts have also cut their firstquarter estimates on the bottom line at a steeper rate than average from dec 31 to march 30 analysts lowered their earningspershare estimates by 63 analysts typically temper those forecasts over a given quarter as financial realities emerge but in the past five years that average decline during a quarter has been only 28 factset said “given the continuing concerns in the market about bank liquidity and a possible broader economic recession did analysts lower eps estimates more than normal for sp 500 companies for the first quarter the answer is yes” factset senior earnings analyst john butters wrote friday for more an earnings recession seems inevitable but it might not last long and while investors managed to push the sp 500 index 67 higher through the first quarter more executives than normal have tried to temper those investors’ expectations seventynine companies in the sp 500 so far have put out downbeat earnings forecasts above the average tallied over five years according to factset the dimmer sentiment on corporate earnings comes as wall street worries about the impact of higher prices and higher interest rates on the economy many businesses have raised prices to cover costs and protect or pad their bottom lines following an initial round of supply shocks in 2021 and 2022 related to covid19’s squeeze on supply chains and the war in ukraine some analysts have said those efforts to guard profit margins via higher prices have played a large role in pumping up inflation overall then regulators swooped in to protect deposits at silicon valley bank and signature bank after they collapsed last month while the nation’s biggest banks gave first republic bank frc a multibilliondollar infusion abroad credit suisse group ag csgn struck a deal to borrow up to 54 billion from the swiss central bank see also bank stocks whipsawed but bank profit estimates barely budged not everyone agrees when or if a recession might hit and whether a rebound might arrive in the second half of the year but analysts at oxford economics in a note on thursday said borrowing money could become more difficult for people looking for a loan “looking ahead the economy will face the full brunt of tighter credit conditions and fed policy this year and inflation is set to stay above its historical trend” they said “the recent banking sector turmoil will affect the economy mainly through tighter lending standards and a reduction in the availability of credit” they continued “we expect a recession to hit in the second half of 2023 with a peaktotrough gdp decline of around 15” however despite the banking ruptures wall street has remained blasé on the potential impact on financialindustry profits factset expects earnings from the financial sector to grow 32 during the first quarter and it expects the sector to lead the sp 500 overall on revenue growth with gains of 91 more broadly online retail giant amazoncom inc amzn was seen leading a rebound in the consumer discretionary sector factset said after higher prices in 2022 forced more shoppers to spend their savings on essentials like gas rent and groceries rather than things online profit gains were also expected in energy which has benefited from higher oil prices four sp 500 companies will report firstquarter results in the week ahead the highlights for the week center on food where prices have stayed high and clothing where discounts have proliferated the calls to put on your calendar are jeans a commodity jeans maker levi strauss  co levi reports results on thursday and the results could serve as a proxy for what clothing people still want higher prices stretch budgets the company will report after retailers cut prices on clothing in an effort to tighten up bloated inventories following last year’s sharp turn in consumer spending toward more basic needs some analysts have said that demand for denim is slowing with signs that chinos and cargo pants have fallen more into favor as people return to offices and formal occasions others have said that customers were likelier to seek out cheaper alternatives for things like jeans levi’s executives disagree but some analysts have said there’s room for clothing prices to drop further as shoppers remain cautious about the economy food prices and the food industry’s command over them after russia’s invasion of ukraine more than a year ago initially disrupted global oil and grain supplies food prices have stayed higher industry executives say customers haven’t pushed back not that those customers have much of a choice for essentials like groceries some of those producers have made more money by hiking prices while selling fewer actual goods a practice that not all investors believe is sustainable results from packaged and frozenfood producer conagra brands inc cag  due wednesday along with frozenpotato and frenchfry maker lamb weston holdings inc lw on thursday could offer more of a sense of where profits volumes prices and costs are headed and to what degree they’re diverging