According to Dan Greenhaus of BTIG, based on early results from earnings season so far, total S&P earnings for the quarter might actually be up from last year:
On the earnings side of things, despite some high profile issues (GOOG, APOL, IBM, CMG after the close), earnings season is going according to plan; just one quarter of companies have reported negative EPS surprises. That is to say, it’s better than consensus. It’s still too early (100 companies have reported) to make sweeping judgments but we can say somewhat confidently that earnings will not be below year ago levels. Now for sales, that might be a different story but in any event, the S&P 500 is still higher today than when AA reported after the close on the 9th.
This was not what was expected.
Many people predicted that this was going to be the first quarter since the financial crisis where earnings dropped year-over-year.
Here’s the chart. Note the down grey bar at the very end showing predictions.
If the trend does hold up and earnings stay positive, remind yourself to mute the TV everyone says that the market rally hasn’t been fundamentally driven.