Everyone has been freaking out about Q1 because growth expectations have been so low.
However, it appears that expectations were too low…as usual.
Week one of earnings season is over and things are looking up. 32 of the S&P 500 companies have announced earnings and 75 per cent have beaten analysts’ average estimates. That’s better than the 72 per cent beat rate seen in the last four quarters. This is according to data collected by FactSet.
According to their latest estimates, analysts expect 0.0 per cent year-over-year EPS growth in the S&P 500 for Q1.
But with growth estimates so low, why the stock market rally? FactSet thinks investors are looking further out in term of earnings growth. Here’s a chart of quarterly S&P 500 EPS growth courtesy of FactSet: