Recent activity in stock markets has many investors excited for the potential gains that could come as a result of a strong recovery in corporate earnings.

However, some bearish analysts have argued that the market’s underlying fundamentals were vulnerable even before the COVID-19 pandemic rose in severity.

If this assertion is true, stock investors will need to adopt a more objective approach that focuses on comprehensive economic data (rather than emotions) when making determinations about whether to buy into the latest rally in equities markets.

For the first-quarter period of this year, companies in the S&P 500 have already reported aggregate earnings results that have surpassed analyst estimates by about 2.1%. Of course, this is a performance that might sound encouraging for investors after the dramatic downside revisions we’ve seen this year with annualized GDP projections around the world.

However, these earnings results fall far short of the market’s long-term averages and that is why these seemingly bullish performances actually represent trends in declining momentum that should be discouraging for most stock investors.

Over the last five years, aggregate earnings figures for companies in the S&P 500 have beaten analyst estimates by an average of 4.9%.

Clearly, this significant difference indicates additional weaknesses in equities that might not be immediately apparent based on the near-record valuation levels that still characterize many industry sectors.

These diminishing trends in corporate EPS performances also suggest there are important industry sectors that were already under pressure before the COVID-19 pandemic brought negative influences into global markets.

Unfortunately, these companies may now be vulnerable to potential earnings disappointments that could be even more pronounced if the pandemic’s economic consequences continue in the quarters ahead.

With about 90% of all S&P 500 companies reporting first-quarter earnings results, roughly 65% of those companies have managed to beat analyst estimates for EPS during the most recent reporting period. Over the last five years, an average of 73% of the companies in the S&P 500 have beaten analyst EPS estimates and this is why any near-term rallies in stocks will continue to look questionable.

From a trading perspective, it’s also clear that the market has been mostly reluctant to sell shares of companies in the S&P 500 after they have reported negative earnings results.

During the first-quarter earnings season, companies in the S&P 500 reporting earnings results that fell below analyst expectations have experienced an average decline of just -1.1% in share prices following the release. During the last five years, S&P 500 companies reporting bearish earnings surprises experienced average stock declines of -2.8% following the release.

Essentially, this means investors are still managing to find ways to “reward bad behavior” with limited selling pressure following recent earnings disappointments. But if stocks are not appropriately valued in this type of market environment (amidst unprecedented economic uncertainties), the prospects for a dramatic and volatile price decline will continue to grow.

True financial recoveries are almost always more sustainable when they develop in a gradual manner, so the enthusiastic buying activity we are currently seeing in the market appears to be based more on emotion rather than fundamental economic data.

In these types of market environments, investors can compare robo advisers as a potential solution to help sift through these complicated economic figures in a more objective manner.

When implemented correctly, the market’s best robo advisers can allow investors to manage portfolio strategies in ways that are tailored to the needs of each trading style while focusing on the fundamental data that truly drives the financial markets.

Richard Cox is a personal investor with more than two decades of experience in the financial markets. He is a syndicated writer, with works appearing on CNBC, NASDAQ, Economy Watch, Motley Fool, and Wired Magazine.