Back to the Drawing Board on Earnings? It might be interesting to see if earnings estimates for Q1 start to change in the days ahead after Tuesday’s rush of better-than-expected resuslts from key companies. Of course, there’s a long way to go until the end of earnings season, but we’ll be about 50% of the way there by the end of the week. Upside earnings surprises have seemed like the rule so far, not the exception, in a season when many analysts had predicted a moderate overall decline in year-over-year S&P 500 earnings results. Earnings are down year-over-year, but how much they’ll ultimately fall remains a moving target.
Early this week, FactSet predicted that assuming earnings surprises are at “average levels” this season, overall S&P 500 earnings would be down “slightly” in Q1. But “slightly” is a lot better than a 4% or worse decline that many analysts had predicted before the season started. Hopes that the patient might be among the walking wounded rather than in a hospital bed could help explain the S&P 500 Index’s (SPX) rise to near record highs Tuesday.
Home Brew: Speaking of wounded, that might still be the best description
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