Sometimes investors can glean some clues as to the direction of the US markets and economy based on the market’s perception of Earning Season.

Firstly, Bespoke reported last week that the market was entering Earning Season with high expectations (a headwind for the bulls). Drilling down further, Starmine, which has a relatively good record of forecasting earning surprises, gave the following list of five North American stocks that were likely to beat 2Q Street estimates:

Electronic Arts (ERTS), Tyson Foods (TSN), Discover Financial Services (DFS), RadioShack (RSH) and Apple (AAPL).

The list of five forecasted earnings misses are:

Melco Crown Entertainment (MPEL), D R Horton (DHI), TransAlta Corp (TA CN), Royal Caribbean Cruises (RCL) and Canadian Pacific Railways (CP CN).

Admittedly ten stocks is a very limited sample but it can be instructive to analyze the tails of the distributions for clues to the market and economy. Based these obseravations, Tech is likely to be stronger than expected, while Consumer Cyclicals are likely to be weaker (Gaming, Homebuilding, Travel and Transportation), though the appearance of RSH in the positive surprise group is an exception.

Given the high level of expectations going into earnings reporting season, weakness in the cyclicals, combined with the systemic risks posed by a CIT failure (see commentary here and here), are not good signs for the near-term outlook for the market or economy.