Bank of America has declared that we are heading into an earnings recession.

On Tuesday, the bank slashed its expectations for S&P 500 earnings per share to $117.50 from $119.50, implying that for the first time since the financial crisis earnings are set to drop over the prior year.

In an afternoon email on Thursday, NYSE floor governor Rich Barry outlinedthree reasons why earnings are headed this way:

• A ~50% drop in the price of crude oil which is having a catastrophic impact on earnings in the energy sector, (down ~65% year-over-year)
• The US dollar rising by ~20% since June which has a negative impact on the earnings of multi-national companies who are members of the S&P index;
• Lastly, it is always safe to throw the 'bad weather' excuse into the mix as well.

And the only reason why stocks are not tanking in response is that investors see these three things as temporary.

Stocks were trading in a tight range on Thursday, though all of the major indexes were marginally positive near 2:00 pm ET. 

Aluminium group Alcoa unofficially kicked off earnings season Wednesday, reporting that first quarter earnings topped investors' expectations though revenues fell short of estimates.

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