The U.S. may be close to the peak of its earnings cycle, but earnings still have room to climb — and markets are failing to reflect that potential, according to asset manager NN Investment Partners (NNIP).

Investors seem to have reacted with near indifference to an objectively strong corporate earnings season. Reuters calculated that first quarter earnings were expected to increase 27 percent from the first quarter of 2017.

Of the 465 companies in the S&P 500 index that reported earnings up to May 18, about 80 percent reported earnings above analyst expectations, the wire agency reported. As for revenues, 75.2 percent of companies reported first quarter 2018 revenue above analysts’ expectations.

But stock market averages are barely higher than they were at the beginning of the season — as of Tuesday, the S&P 500 was a negligible 0.6 percent higher than it was at the year’s start.

Netherlands-based NNIP, in a research note Tuesday, described the market response so far as “lukewarm.” Analysts have put this down to earnings expectations being priced-in, a record bull climb in 2017 that couldn’t be sustained, and expectations of Federal Reserve monetary policy tightening along with trade war fears.

Still, the investment firm predicts the U.S. may well be able to sustain its earnings levels for some time.

“This looks like a typical late cycle phenomenon. Investors are looking for signs that the earnings cycle is near its peak, which in absolute earnings growth terms is likely,” said Patrick Moonen, principal strategist multi asset at NN IP, noting that next year growth will fall back towards single-digit territory.

Nonetheless, he added: “At the same time, there are indications that while we are in late cycle it is not down-cycle — since mid-April, the momentum in sales and gross operating profit are accelerating again.”

Moonen said that wage growth has been muted despite unemployment falling below 4 percent, therefore not putting a major strain on profits.

Investors have expressed bewilderment at the current market. Barings CEO Tom Finke, who heads up the firm’s $304 billion in assets under management, called it “a very strange recovery.” He said: “We have sectors that are dying and industries that have grown dramatically, and valuations that seem unrealistic… but Amazon keeps growing.” The reference to the tech giant was a nod to its more than 34 percent stock price increase since the start of this year.

But while NNIP seems confident about the road ahead for corporate earnings, others are not so keen on holding onto equities in the current climate.

“Take your money off the table,” Cross Border Capital Chief Executive Michael Howell told CNBC’s “Squawk Box Europe” on Tuesday. He warned that rising bond yields and a flattening yield curve, which mean higher borrowing costs and indicate negative investor sentiment toward short-term lending, respectively, should make those invested in equities “very worried.”

Other investors have cautioned against underestimating the impact of quantitative tightening, as central banks gradually raise interest rates from post-financial crisis lows.