There are two words that sum up Wall street’s mood for first quarter earnings: Cautiously optimistic.

“I think that’s the right way to put it,” says Alec Young, a global equity strategist with S & P Capital IQ. He forecasts 4 percent growth in profits overall in sectors like housing, telecom, and consumer staples.

But after a few years of strong profit growth, S&P 500 companies are making more sober predictions.   

“84 companies have actually lowered their expectations for first quarter earnings,” says Tim Ghriskey, who works with the investment management firm Solaris Group. He says we’ve seen a pattern appear over the last two years. A strong first quarter and a weak second.

“In terms of first quarter earnings, optimistic. In terms of second quarter earnings, more cautious.” 

Cautiously optimistic — at least until companies feel the effects of the sequester budget cuts.