According to experts at investment and asset management firm LPL Financial, pessimism about corporate earnings in 2023 has gone too far, and there are all signs on the horizon that the pressure on corporate earnings is already easing, including a weaker dollar, Business Insider wrote.

A slight decline in corporate earnings forecasts could actually be a positive catalyst for stock prices, LPL noted.

The outlook for corporate earnings this year is too cloudy as the reopening of businesses in China and other factors negate the likelihood of a global recession, which in itself is a good sign for stocks.

In the fourth quarter, corporate cost pressures from inflation, persistent supply chain issues and sluggish growth are likely to drag down S&P 500 companies’ earnings by 3.6%.

That said, experts believe that pessimism about earnings for 2023 has gone too far, and earnings estimates for 2023 are likely to decline but not collapse this reporting season. The path to S&P 500 EPS below $220 this year will be gradual.

According to FactSet, S&P 500 companies generate about 40% of their revenues outside the U.S., while U.S. GDP in the fourth quarter is likely to exceed projected growth of 1.2%. T LPL said Europe’s economy is also faring better than expected, mainly due to lower natural gas prices.