Q3 Earnings: Best in a Long Time

The last few days have everyone wondering whether the rally can continue. Is the market's move supported by the fundamentals, and can the economy recover fast enough to drive further earnings growth?

Looking strictly at reported earnings so far this quarter, S&P 500 companies continue to report significantly better than expected results. In the previous quarter the average difference between EPS estimates and reported EPS was $0.08; this quarter it is $0.09. Furthermore, the ratio of companies that beat earnings to those that missed is 6.25 (150 beats vs. 24 misses).

This earnings season has been met with skepticism and scrutiny, but the numbers so far have been better than any period during the '02 - '07 bull market.

click to enlarge

Comments

[javos:]

Your observation and comparison depends on all other possible components remaining equal. How about the possible explanation of many senior analysts being fired/laid off and the earning estimates being performed by junior analysts, who of course, are less competent? And then, there

Oct 28 03:55 PM