Earnings projections plunge as tariffs stoke market uncertainty

Wall Street is bracing for a turbulent second quarter as earnings forecasts face sharp downward revisions. Ahmed Riesgo, chief investment officer at Insigneo, joined TheStreet to explain why the upcoming earnings season could set the tone for months to come.

Related: Expert sounds alarm on 'depression-era level' tariffs

Full Video Transcript Below:

AHMED RIESGO: Right so for the immediate term, for the short term for Q2, I think volatility will remain high. I think at best the market will trade sideways, but we'll likely see more weakening here. Because remember we still have earnings estimates yet to come. So I would say for investors keep your eye on earnings. See what the earnings impact is going to be and what companies are projecting them to be. That's usually the best guidepost for what we could see in the months ahead. 

It's very difficult to say right now as far as a strong Q2 earnings season before the announcement by Trump on April 2nd. We were projecting somewhere around 5% earnings growth, which is slightly lower than what we were expecting at the beginning of the year given the announcements on Tuesday, April 2nd. I think it's likely that they come down even more. We could even see some around 2% to 3% growth. But that's based off a lot of assumptions. I think anyone that takes a high conviction view right now on, or makes forecast changes on either economic growth or earnings estimate is really rolling the dice because there's just too much uncertainty. And remember, markets do not like uncertainty. Markets it's not even a matter of bad news. It's the change in the bad news that drives volatility.