Major companies are about to tell investors how they fared during the second quarter as the coronavirus swept over America. And there’s no sugarcoating it. To paraphrase the title of a popular children’s book: It was a terrible, horrible, no good, very bad three months.

Brace yourself: According to estimates compiled by FactSet, analysts predict that earnings for the S&P 500 plummeted nearly 45%, which would be the biggest drop since a 69% plunge during the depths of the Great Recession in the fourth quarter of 2008. Revenues are expected to have fallen more than 10%. Retailers, energy companies and industrial firms likely reported the biggest declines in sales and profit.

Financial firms take center stage this week. JPMorgan Chase, Wells Fargo, Goldman Sachs, Bank of America and BlackRock are just a few of the big banks and asset managers that will post their latest results.

“Now that we are getting through the first full quarter of Covid-19 lockdowns … the effects of the pandemic and resulting loss of economic activity are starting to show an impact,” Mark Doctoroff, managing director and global co-head of the financial institutions group for MUFG, said in an email to CNN Business.

Doctoroff said investors will be keeping a close eye on loan quality — especially after a recent spate of high-profile corporate bankruptcies. Consumers may have struggled to make auto and credit card payments as well, even as many banks have offered mortgage forbearance programs.

But Doctoroff added that there could be some bright spots to bank earnings. Profits from trading desks could be robust, thanks to the surge in stock market volatility. Financial firms may also post solid results from their debt underwriting businesses. Companies have been rushing to issue new bonds as interest rates remain near zero.

Banks won’t be the only companies in the earnings spotlight. Pepsi, Delta, Netflix and Dow components Johnson & Johnson and UnitedHealth are also due to report their latest results.

It seems unlikely that many of these firms will provide much in the way of financial guidance due to the uncertain nature of the economy. For what it’s worth, analysts expect the profit picture to improve as the year progresses. And analysts now predict a big rebound next year, with profits expected to rise 12% in the first quarter and nearly 30% for all of 2021.

Hopes for a rapid, pronounced V-shaped recovery in earnings have been one of the main reasons why the overall market has rebounded so quickly from its March lows.

The S&P 500 is now down only 1.4% this year. It’s possible that the bear market is already over even though the overall economy remains weak and there are worries about another surge of Covid-19 cases in the United States. But the Federal Reserve has helped fuel expectations of a comeback with its trillions of dollars of loan programs.

“What you are looking at over the next 12 months is still a moderate recovery,” said Erik Knutzen, chief investment officer of multi-asset for Neuberger Berman, adding that there is a “titanic struggle” in the markets between bears focusing on weak fundamentals and bulls who have expectations for more stimulus.

Why Wall Street may be turning on US stocks

Is it time to look for stock buys outside the United States?

It’s a question investors are asking more and more as they ponder how long the massive run-up in US shares can continue.

The numbers: The S&P 500 has risen 42% since its low point on March 23. Europe’s Stoxx 600 index has gained 31% since its March low.

But Wall Street strategists are increasingly looking at European shares more favorably, noting the strength of the region’s recovery from Covid-19 and seeing opportunities to tap value.

Last week, BlackRock downgraded US equities to a “neutral” rating, warning that a surge in coronavirus cases could hit the recovery just as support for more government stimulus starts to wane. Its strategists said they now favor European shares, citing robust public health measures and a “ramped-up” policy response.

They’re not the only ones. On a recent call with reporters, Evan Brown, head of multi-asset allocation strategy at UBS, praised German Chancellor Angela Merkel for quickly moving to roll out fiscal stimulus measures. There’s a lot of room for Europe to outperform, he said.

The counterargument: The massive rebound in US stocks has been driven by surging shares in companies like Apple, Amazon, Microsoft and Alphabet, which helped push the Nasdaq toward a series of all-time highs last week. There’s no reason to think these companies will falter soon.

Brian Belski, chief investment strategist at BMO Capital Markets, said Friday that he believes US tech stocks can keep outperforming over the next 12 to 18 months given expectations for longer-term growth. But he told clients that selectivity may be increasingly important, and encouraged them to look beyond the traditional Big Tech names.