Wanted: Market Seeking Catalyst in 2Q13 EarningsThis week marks the unofficial beginning of second-quarter earnings season as Oracle Corporation (ORCL) reports. Next week, it’s NIKE, Inc. (NKE).

These two benchmark companies offer the first glimpse of business conditions for multinational corporations. What they report is material.

Last quarter, NIKE surprised Wall Street with excellent relative growth in revenues and earnings, particularly in the North American market. Oracle came in just under consensus. The stock’s been treading water for the last several months.

Corporations have been coy with their earnings guidance, both out of the collective uncertainty regarding the economy and to make it easier to beat the Street. It’s always a delicate dance that corporations play with investors. Earnings are definitely managed, which is why it’s important to look at cash flow and other financial metrics to get a better understanding of a company’s performance.

If there’s one trend apparent in the financial results of large corporations, it’s that balance sheets have been getting stronger. And this bodes extremely well for dividend-seeking investors. I have a strong inclination this earnings season that we’re going to see continued increases in dividends and expanded share buyback programs to pay for them.

Generally speaking, I wouldn’t be buying this market, but I wouldn’t sell blue chip positions either. Market timing is always extremely difficult, but it’s pretty tough to make the case that stocks aren’t due for a break.

While there’s been some peculiar trading action over the last week in global capital markets, there is still an appetite on the part of big investors to buy stocks if earnings meet or beat consensus.

First-quarter earnings season saw corporations report revenues that were mostly underwhelming. Some of the best blue chips like Johnson & Johnson (JNJ) and PepsiCo, Inc. (PEP) really hit the mark with their earnings, and they did produce genuine sales growth that the stock market rewarded.

All the market wants to see is continued stability in earnings, along with genuine constant currency growth in revenues. It doesn’t have to be double-digits, but it does have to be real.

We have seen some good numbers from select corporations like Cabela’s Incorporated (CAB) and Costco Wholesale Corporation (COST), which are representative of improved consumer confidence. For a number of quarters now, corporations reported that price increases were not materially affecting demand. (See “Big Investors Still Buying Big-Caps; Will They Be Right?”)

One thing I’m not loosing sight of is the fact that this market has been due for a meaningful pullback for a number of months. A stock market correction is overdue and would be a very natural development after such strong capital appreciation.

This market won’t fight monetary policy, but I think it is looking for a catalyst to sell.

This week, it’s time for two corporations to produce: FedEx Corporation (FDX) and Oracle.