The picture emerging from the Q2 earnings results thus far is one of modest improvement from the extremely weak levels over the last couple of quarters. Growth is still non-existent and Q2 is on track to be the 5th quarter in a row of earnings declines for the S&P 500 index. That said, the results thus far are indicating that the worst may be behind us. If the coming results confirm this trend as well, then we can start having a little more confidence in earnings expectations for the second half and beyond.

The reporting cycle really accelerates this week, with almost 1000 companies coming out with Q2 results, including 189 S&P 500 members. This week’s line-up packs plenty of leaders from all the key sectors, ranging from Apple (AAPL -Analyst Report) and Facebook (FB - Analyst Report) to Caterpillar (CAT - Analyst Report) , Exxon (XOM - Analyst Report) and much more in between. As such, it may not be unfair to characterize this week as a make or break week for the Q2 earnings season. This week will either fully confirm the reassuring and encouraging start we have had thus far or turn it around in the opposite direction.But the trends established this week will carry through the rest of this reporting cycle with only minor changes.

The Q2 Earnings Scorecard (as of July 22nd)

We now have Q2 results from 126 S&P 500 members that combined account for 32.7% of the index’s total market capitalization. Total earnings for these 126 companies are down -1.1% from the same period last year on -2.6% lower revenues, with 70.6% beating EPS estimates and 55.6% coming ahead of top-line expectations.

The table below provides the current scorecard

With results from almost one-third of the index’s total market capitalization out, we have a pretty representative sample of this quarter’s earnings already. At this stage, the Utilities sector is the only one that has yet to report results and the Energy sector has the fewest. For all the other sectors, we have results from at least one-fifth of their respective market caps in the index.

The side-by-side charts below compare the results thus far from the 126 index members with what we have seen from the same group of index members in other recent periods. The left-hand chart compares the earnings and revenue growth rates with historical periods while the right-hand chart is doing the same comparisons for positive EPS and revenue surprises.

Here are the takeaways from these comparison charts are:

First, the earnings growth remains negative and weaker compared to the 4- and 12-quarter averages, but it is an improvement over what we saw in the preceding quarter.

Second, revenue growth is not only positive, but also tracking above what we saw from this group of 126 S&P 500 members in 2016 Q1 and the 4-quarter average.

Third, positive EPS surprises for this group of companies are tracking below historical periods. This suggests that estimates may not have been that low after all.

Fourth, positive revenue surprises are about as numerous as was the case in the preceding quarter. But the proportion of positive surprises is notably tracking above the 4-quarter average and even modestly above the 12-quarter average. What this means is that not only is revenue growth tracking above other recent periods, but so are positive surprises.

Expectations for the Quarter As a Whole

Looking at Q2 as a whole, combining the actual results from 126 index members with estimates for the still-to-come 374 companies, total S&P 500 earnings are expected to be down -3.4% on -0.5% lower revenues, with growth in negative territory for 9 of the 16 Zacks sectors. The Q2 growth pace has ‘improved’ as companies have come out with improved results, but the quarter is still on track to be in the negative for the 5th quarter in a row.

As has been the pattern in other recent periods, the Energy sector remains the biggest drag on the aggregate growth picture, with total earnings for the sector expected to be down -78.7% on -25.4% lower revenues. Excluding the Energy sector, earnings for the rest of the index would be up 0.1%.

The table below shows the summary picture for Q2 contrasted with what was actually achieved in the preceding period.

While Energy stands out for its very tough comparisons, there is not much positive growth coming from the other major sectors either. The Finance and Technology sectors, the two biggest earnings contributors in the S&P 500 index, are also expected to see earnings decline in Q2 from the year-earlier levels.

For the Finance sector, total Q2 earnings are expected to be down -0.4% on -0.5% lower revenues, which will follow -6.9% decline in the sector’s earnings in the preceding quarter.

The Technology sector, total earnings are expected to be down -3.0% on +2.7% higher revenues, which would follow the sector’s -4.5% earnings decline on +0.4% higher revenues in Q1. The big culprit for the Tech sector’s weak showing this quarter (as well as last one) is Apple (AAPL - Analyst Report) , whose June quarter earnings are expected to be down -28.8% on -15.6% lower revenues from the same period last year. Excluding Apple, the Tech sector’s Q2 earnings would be up +3.5% (Apple alone brings in roughly a fifth of the Tech sector’s total earnings).

On the positive side, Q2 earnings are expected be up at Autos (up +18.4%), Construction (+10.8%), Conglomerates (+17.6%), and Utilities (+20.9%). The Utilities and Conglomerate sectors’ strong growth numbers are solely due to easy comparisons at AES Corp (AES - Analyst Report) and General Electric (GE - Analyst Report) , respectively.

Expectations Beyond Q2

The chart below shows current quarterly earnings growth expectations for the index in 2016 Q2 and the following four quarters contrasted with actual declines in the preceding four quarters. As you can see, Q2 is on track to be the 5th quarter in row of earnings declines and estimates of Q3 growth starting to go deeper into negative territory as well.

The only meaningful positive earnings growth this year is expected to come from the last quarter of the year, which is then expected to continue into 2017 when earnings for the S&P 500 index are expected to be up in double-digits. We will see if those estimates will hold up as we reach the last quarter of the year. But given what we have seen over the last few quarters, the odds don’t look that favorable.

Here is a list of the 951 companies reporting this week, including 189 S&P 500 members.