Here's how you turn a crappy stock market story into a really bullish one

Earnings are estimated to have declined during the third quarter, an unfavorable development that may be exacerbating the turbulence in the markets.

The primary source of this weakness comes from the energy companies, which have seen profits collapse amid crashing oil prices.

Many folks would argue that the pain in the energy companies is unlikely to persist, and therefore does not reflect the underlying earnings power of corporate America. Importantly, it masks how consumers and many industries other industries are benefiting from low energy costs.

Excluding energy, suddenly the earnings picture turns posit ve.

RBC Capital Markets' Jonathan Golub illustrates this tweak and goes one step further noting that companies historically beat expectations for earnings growth by about 4 percentage points.

"Current projections indicate a 4.2% decline in 3Q S&P 500 EPS, largely the result of Energy weakness (EPS -64% YoY)," Golub wrote on Monday. "Assuming an historical 4.0% beat rate and excluding Energy, trend growth should come in between 7-8%, shown below."

It's worth noting that extended periods of broad-based declining earnings have been associated with recessions. The rare exceptions include periods when its the energy sector leading the way down.

"This highlights that we are not experiencing a broad-based earnings recession despite weak headline expectations," Golub said.