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Takeaway: Earnings season has just begun and the outlook for the Industrials is looking awful.

Earnings Season? Ugly. Nasty. Just Getting Started - Earnings cartoon 11.03.2015

If the past week of company earnings updates is any indication of what's in store for earnings this quarter, it could get ugly in equity markets fast.

First, we heard pre-announced guidance revisions on Friday from Honeywell (HON) and PPG Industries (PPG), and then Dover (DOV), yesterday. The results weren't pretty, with downward revisions to company earnings and revenue estimates which sent shares tumbling.

Alcoa (AA) kicked off (official) earnings season today with a bang. But not in a good way. Shares of the industrial conglomerate have plunged -11% so far today after reporting $5.21 billion in revenue. That's down 6% from the prior year. It missed analyst projections of $5.31 billion. 

For the record, Alcoa even managed to miss bombed-out Wall Street consensus' earnings per share estimates of $0.33, versus as reported EPS of $0.32. (Note: Wall Street's estimates were down -12% from the prior week and down -30% from a year ago. #Sad.)

Then came Fastenal (FAST)...

Shares are down -5% so far today after the manufacturer of screws, nuts and bolts missed EPS and revenue estimates. Not pretty.

Digging into Fastenal's conference call revealed some interesting insight about the broader U.S. economy. Here's CFO Holden Lewis:

"Qualitatively, it's not clear to us that the tone changed much in the third quarter. We saw that the sales of fasteners and heavy manufacturing construction end markets were relatively weak as we have seen before. The same could be said of our largest customers, our top 100 was flat to maybe down slightly during the period. But again, these are the same dynamics that have persisted throughout 2016."

The company execs were candid about the outlook for the industrial economy. During Q&A, the first question was directed to CEO Daniel Florness about whether he was "seeing any signs that the industrial economy is bottoming?"

"I can't say that we are... I can't say that we saw any kind of inflection."

Wow. Keep in mind this is the same guy who said, while CFO of Fastenal in October 2015, “The industrial environment is in a recession. I don’t care what anybody says because nobody knows that market better than we do.” Believe him.

On a related note, our Macro team reiterates last week's 4Q Macro Themes call for a #DoubleDipRecession in Industrials. An appropriately timed callout, indeed. With earnings season just getting started there's no telling what's in store.

So far, it's not looking good.