The initial earnings results of this reporting period are beating expectations by a wide margin, suggesting to some investors that the S&P 500 may be able to avoid a so-called "profit recession" this year because predicted economic bad news has failed to materialize.

That is a reversal of the view from a few months ago, when the 2019 profit outlook appeared to be getting worse. Earnings already faced tough comparisons with last year, when the U.S. tax code overhaul provided a big boost.

The quarter could be the trough for "this mini down cycle," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "The market is now expecting to see earnings stabilize. Eventually, if the global story gets better as we expect, earnings will help propel the market higher later this year."

Though it is still early in the season, the aggregate profit forecast has improved from an estimated year-over-year decline of 2.5% a week ago to an expected decline of just 1.7% as of Thursday, according to IBES data from Refinitiv.

The average earnings surprise so far is higher than what is typical. Nick Raich, CEO of The Earnings Scout, said based on his data, the earnings surprise factor for the 77 S&P 500 companies that have reported is 6.1%, the highest in at least three years.

The average earnings surprise for an entire earnings period since 1994 is 3.2%, based on Refinitiv's data.

Moreover, 78% of the companies reporting have beaten estimates on earnings per share, above the amount at the same time last quarter.

The data underscores the view that S&P 500 companies will end up posting an increase in year-over-year earnings for the first quarter, and that a profit recession - defined as two straight quarters of year-over-year earnings declines - is much less likely in 2019. That, in turn, could support the argument that a long bull market in stocks could get longer still since earnings drive stock prices.

The last S&P 500 earnings recession ran from July 2015 to June of 2016.

"Numbers were slashed significantly going into this reporting period," said Lindsey Bell, investment strategist at CFRA Research in New York. "I think we are going to end up seeing flat to positive growth for the quarter when it is all said and done."

To be sure, the earnings season is just getting going, and corporate earnings face a number a headwinds: costs are rising because of tensions with U.S. trading partners, a stronger dollar diminishes the value of overseas sales, and technology companies in aggregate are looking at a likely profit decline in the first quarter.

Analysts began to cut earnings forecasts for 2019 in the fourth quarter and the market sold off as worries increased over the interest rate and economic outlook, and as the United States' trade conflict with China seemed far from over.

But those fears have eased since then, and the S&P 500 index has risen sharply since late December.

Profit forecasts for the second quarter and beyond have steadied as well.

"We have actually seen some signs of life as companies are starting to report first-quarter earnings slightly better than expected," BlackRock Inc's chief equity strategist, Kate Moore, said during the asset manager's quarterly U.S. wealth advisory event on Wednesday.