Are Stocks REALLY Cheap? Not if You Look at Earnings so Far

 Don't know what to do with your Dollars right now? Stocks look good, but be careful.

Earnings season so far may look respectable, but a disturbing trend lurks below the surface: Companies for the most part are barely beating analyst expectations that already had been lowered substantially.

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 That's important as bullish fund managers try to sell their clients — most of whom remain on the sidelines — the stocks-are-cheap theme, bolstered by a historically below-par price-to-earnings ratio for the Standard & Poor's 500 [.SPX  1326.06    11.41  (+0.87%)   ].

Should earnings remain medicore while the European debt crisis intensifies and the U.S economic recovery wobbles, that threatens the early-year stock rally, in which the S&P 500 has gained a healthy 4.5 percent.