Earnings season has started with a whimper, at best.

Of the 64 S&P 500 companies that have reported fourth quarter earnings so far, a slightly below average 52% have beaten analyst consensus earnings estimates, points out David Kostin, Goldman Sachs chief U.S. equity strategist. 

But it's guidance — or lack thereof — that has been the biggest red flag as companies battle through unpredictable inflation and varying COVID-19 issues.

Kostin notes that only six companies in the S&P 500 have provided formal guidance for the first quarter. Five of the six companies have guided below consensus earnings estimates, including three companies that beat on fourth quarter estimates. 

Only chip giant Micron has beaten on quarterly earnings and raised guidance for the current quarter. Meanwhile, Netflix's lackluster first quarter outlook "stunned investors," Kostin said.

"Investors are most interested in forward-looking guidance from managements, and recent information on that front has been concerning," Kostin added.

The market actions suggests growing angst on trading desks about the next few weeks of earnings season, among other worries such as looming interest rates hikes from the Federal Reserve,

Last Wednesday, the Nasdaq Composite fell into correction territory — marked as a 10% decline from a recent high. Research from Morgan Stanley chief markets strategist Mike Wilson's shows 40% of the Nasdaq has corrected by 50% or more.

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As it stands, the Nasdaq is down 12% so far in 2022, followed by an 8.2% drop for the S&P 500 and a 5.7% decline for the Dow Jones Industrial Average. 

"While the average stock has seen quite a bit of downside, the major averages still have a good 10% down from here," said Wilson on Yahoo Finance Live.

The risk-off tone has spread to bitcoin prices, too. 

Bitcoin is trading at $33,482, down nearly 30% year-to-date. The benchmark crypto has shed 51% from its Nov. 10 high of around $68,000.

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Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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