Top strategist’s Q2 earnings scorecard

Halfway through corporate earnings season, there is still a soft spot investors should note, Deutsche Bank Chief Equity Strategist David Bianco said Thursday.

"I would tell you that earnings season – it's not a disaster but certainly not inspiring enough for us to raise our target," he said.

Bianco, who held a year-end target of 1,675 for the S&P 500, said that he expected the index to decline below 1,600 before heading up around 1,750 in the near-term.

"We still have an earnings season that I think analysts need to digest and appreciate that what's still soft in the environment is business spending," he said. "If you look at S&P sales, it's been lagging U.S. GDP nominally for five quarters now."

On CNBC's "Fast Money," Bianco added that capital expenditures were important.

"The key to getting a pickup in earnings and sales importantly is getting a pickup in business spending," he said.

In the balance were such factors as the "probability" of Europe emerging from its recession, the United States "chugging along" and a continued slowdown in Asia, particularly in China, Bianco added.

Those factors, he added, were "causing some concerns for a pick-up in business spending that needs to materialize by the third quarter. Otherwise, I think you get investors that move to protect gains for the year, then the market dips."

Bianco noted that the spread between WTI and Brent crude had closed.

"That's a bright spot for capex, and I think oil services and even some smaller cap names like Oceaneering will benefit from that," he said. "I still like parts of industrials like aerospace. I would look out there for things like Embraer.

"But the point is, cap ex is barely growing, and the only thing that is supporting it right now is elevated oil prices."

— By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

— CNBC's Katie Young contributed research to this report.

Trader disclosure: On July 25, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephanie Link is long F; Stephanie Link is long JOY; Stephen Weiss has nothing to disclose; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long V; Josh Brown is long LGD; Jon Najarian is long AAPL; Jon Najarian is long AMZN ; Jon Najarian is long ZNGA; Jon Najarian is long VLO; Jon Najarian is long BIDU; Jon Najarian is long SINA; Jon Najarian is long OKE ; Jon Najarian is long TIBX; Jon Najarian is long PBR; Jon Najarian is long DFS; Jon Najarian is long NRG December 29; Jon Najarian is long PHM January 19-22; Colin Sebastian is long FB; Colin Sebastian is long GOOG.