Fourth-quarter earnings are off to a rough start as less companies are reporting results above estimates than in the previous five-year average, according to FactSet.

Yahoo Finance Markets Reporter Josh Schafer shares an overview of earnings sentiment so far, looking at the S&P 500's (^GSPC) record-high, tech company forecasts, and expectations for Tesla's (TSLA) earnings

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: Let's stick with the earnings conversation because new data out from Factset's showing that fourth-quarter earnings results are off to a sluggish start. With about 10% of S&P 500 companies reporting results so far, earnings have declined about 1.7%. Here with more, Yahoo Finance's Markets Reporter Josh Schafer.

And, Josh, we were just talking to Octavio about this. But looking ahead in terms of what the Street consensus is coming off of these results that we've gotten so far. What do you make in terms of that setup then, heading into these results that we'll be getting over the coming days?

JOSH SCHAFER: Yeah, I was thinking as you guys were just talking, like, if we want to call it a hockey shootout or something, you normally want your top scorer to go first. And we kind of just sent out--

SEANA SMITH: It set the tone.

JOSH SCHAFER: Yeah, yeah, and we just sent out maybe like a third liner or something-- when we're thinking about financials and thinking about--

SEANA SMITH: It's not great?

JOSH SCHAFER: Not good. Not good if you're not a hockey fan for that comparison.

BRAD SMITH: It's me.

JOSH SCHAFER: But yeah. But we have tech coming up, right? And tech is one of the sectors that people still expect to do well. And when I'm talking about tech, I'm not necessarily even talking about Netflix and Tesla, which you see on the board there.

Remember, they're not actually core-tech companies. We just refer to them in that sense. But we really have tech earnings in and of themselves next week. But one thing that's been interesting to see so far, and I'm curious to see if this narrative changes-- is Bank of America as I would one of their earnings updates pointing out what the stock reactions have been.

So companies that beat on-revenue and beat on-earnings beat the Street's estimates on both. Their stock the next day-- up 0.2%. 20 basis points. Not very impressive if you're someone that owns one of those stocks and is happy your company beat earnings, right?

But if your company misses on both, down 5% the next day. So we're seeing-- when you have the S&P 500 at a record high, it takes a little bit more to get your stock to actually go up. And I think that's one of the more interesting things right now, along with margins. Margins is something that I think we're going to hear a lot about this week when we talk about Tesla and talk about Netflix.

BRAD SMITH: Does it seem like there's just one big theme that we could hear time and time again, kind of just resurfacing among some of these earnings calls?

JOSH SCHAFER: Yeah, I mean, there's a couple, Brad, right? Because we're talking a lot about the labor market I think right now. And talking a lot about what companies are doing in terms of either resizing or not resizing.

And I think it's going to be interesting as we get through tech earnings in the next two weeks, where it seems like a lot of these layoffs are coming from. To actually hear what management says about them, I think is going to be interesting. And then, we did just have that graph up on margins. And I did want to highlight this one.

Margins coming in at their net profit margins coming in at their worst percentage in about three years right now. Now, of course, some of the highest margin companies-- again, we're looking at tech and communication services. Think about how Meta has turned around their margin story in the last year and led this market higher.

They haven't reported yet. So that doesn't include them. But I'm watching that number. Because there is one company that reports this week that's had a pretty bad margin story for several quarters now, and everyone likes to talk about it. And that's Tesla.

So I'd be curious when you think about Tesla. Also, even Netflix has been a margin story that people talk about a lot. But, specifically, Tesla because the margin story hasn't gone great. It'll be interesting to see what we hear and how that narrative sort of shifts this week.

SEANA SMITH: Yeah, exactly. And we're to be talking to an analyst from Canaccord-- next hour. And that's exactly right. He was saying one of the biggest themes to watch for in Tesla. And also what it's going to really tell us going forward is just more so with the EV space.

But that margin story, right, in terms of demand, the pressure that we could see, and some of the pressure that-- then, maybe that we're expecting, could then be present with Ford, GM, some of the other market bears.

JOSH SCHAFER: The market bears have been waiting for inflation to weigh on margins, significantly, for like three years now. So if we get it--

SEANA SMITH: They may finally be right.

JOSH SCHAFER: Yeah, that'd be a big victory.

SEANA SMITH: Yeah. They're sticking with it.

JOSH SCHAFER: Long time coming.

SEANA SMITH: Yeah, you got to give them the respect for that. All right, Josh, thanks so much.