Markets have staged a number of rallies recently, but analysts are divided over whether these signal the end of the bear market could be close. It comes at the height of earnings season, with more than 150 S & P 500 names set to report, including Apple , Alphabet , Meta Platforms and McDonald’s . As investors scramble to call the bottom of the bear market — or not, as the case may be — Morgan Stanley says there’s one “key measure” to track as companies report results: earnings revisions breadth. Earnings revisions breadth is the difference between analyst upgrades and downgrades in earnings estimates, over the total number of estimate changes. And Morgan Stanley says that, within the S & P 500, this indicator has dropped sharply throughout this month. “[The earnings revision breadth] is currently negative telling us that more analysts are cutting their estimates than revising them higher,” the bank’s analysts, led by equity strategist Mike Wilson, wrote in a July 25 note. On the whole, the earnings revisions breadth for the S & P 500 dropped 14.2% to -19.8% as of July 21, according to Morgan Stanley. The indicator has fallen for nearly every sector and industry group, according to the bank. The biggest declines were seen in consumer durables, transportation, materials and insurance, with semiconductors also faring poorly. Companies that fared better were in media, health care and consumer staples. “We believe this is just the first of what is likely to be several disappointing quarters before estimates finally trough,” Morgan Stanley’s analysts wrote. The initial bounce in stocks last week sparked talk that the bulls were returning to the market, with one analyst flagging a signal that may mean the bear market is over . But others on Wall Street have said they do not believe the market has bottomed yet. Goldman Sachs said earnings estimates and margins still have lower to go, and peak inflation — another factor in identifying whether the bear market has bottomed — hasn’t yet occurred. For Morgan Stanley, earnings revision breadth signals the bear market is not yet over. “Recent positive price action to some earnings cuts is unlikely to be the low for most stocks as it’s usually unwise to buy the first cuts when we are entering a major revision cycle,” Wilson and colleagues wrote. As such, they said they were becoming “more convicted” in their view that “earnings estimates are too high and have meaningful (i.e. 10%+) downside from the recent peak.” “Given the extraordinary deterioration in earnings revision breadth … we think the evidence is building for our view to play out over the next several months,” they added. The bank said that it expects many firms, particularly in the tech sector, to miss earnings estimates “more than most investors think.” “This is not just about interest rates rising and multiples. Earnings are next and that risk is just starting with 2Q results and guidance,” it said.