Analysts expect the combined earnings in the first quarter for S&P 500 companies to fall 0.7%, according to research firm Factset. That would mark the second dip in three quarters — it happened in the third quarter of last year as well.

Nonetheless, the S&P 500 (SPX) hit an all-time high on Thursday.

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So what’s going on? For now, investors appear to be putting more weight on what stocks could earn later in the year than what they are actually earning now. Analysts expect earning growth to leap to 15.6% by the end of the year.

The problem is if this year is a repeat of the last few, that probably won’t happen. For the past three years, analysts have been much more optimistic about the fourth quarter than they should have been. For example, back in 2010, analysts predicted earnings at S&P 500 companies would rise nearly 33%. The actually increase: 18%.

You could argue that the string of recent fourth-quarter earnings disappointments could set us up for a surprise this year. But don’t hold your breath. A year ago, fourth-quarter earnings expectations were for 15% growth. Profits actually rose 4%.

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This year could break the bad streak, but that’s not the way things are shaping up. For the first quarter, of the 128 companies that have pre-announced earnings, 105 have said profits will be lower than expected, according to Thomson Reuters I/B/E/S. That’s the largest percentage of negative announcements Thomson has recorded since mid-2001.

And it’s not like companies are going to get a great push from the economy. While expectations are improving, most economists still think 2013 GDP growth will come in at around 2.3%. So the rest of the earnings growth would have to come from much higher inflation — which would boost prices and profits, but not sales — or some serious margin expansion. Inflation that high is sure to force the Federal Reserve to cut back on its stimulus program, which is sure to slow economic growth along with the market. And profit margins are already near all-time highs.

“What we’ve got is a market that has been driven by fiscal stimulus and monetary stimulus,” says top market strategist Rob Arnott. “Now both … are receding or at least in question, the private sector is not going to spend.”