Last week, we looked at how S&P500 companies were doing earnings wise via Birinyi Associates. The numbers were a touch soft (see Earnings Season Getting Underway).
This week teaches us a lesson in the dangers of extrapolation: With 34% of S&P 500 companies reporting, the earnings picture looks much better (versus last week’s charts 11%).
The beats and misses are much more in line with the recent SPX earnings history, which has been the bulwark of the Bull’s case.
Charts courtesy of Birinyi Associates
Mike Thomson of Thompson Financial has been the prime proponent of "Its all about earnings;" He has been clearly right so far.
The one dark cloud has been guidance: Its a but softer than it has been recently:
This may change further as reports come in; However, 34% is a much more signficant sample than 11%, and strongly implies earning will be consistent with previous quarters.