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Commentary
Through last Friday, 88% of the S&P 500 companies have announced second-quarter results. According to FactSet Earnings Insight, an astounding 86% of them have reported positive earnings-per-share surprises, and 76% reported positive revenue surprises. For the full quarter so far, the earnings growth rate (blended, year-over-year) is up by an astounding +50.4%. This is also the 12th quarter in a row in which earnings are exceeding sales growth, indicating an expansion in profit margins, and this is why stocks are rallying.
Contrary to August’s dismal historical record, this August could deliver a big rebound, due to: (1) the rapid growth rate of quarterly earnings, (2) the exhaustion of mean reversion algorithms, (3) the implosion of “Situational Awareness,” and (4) recognition that unscrupulous short sellers are spreading false narratives….
Through last Friday, 88% of the S&P 500 companies have announced second-quarter results. According to FactSet Earnings Insight, an astounding 86% of them have reported positive earnings-per-share surprises, and 76% reported positive revenue surprises. For the full quarter so far, the earnings growth rate (blended, year-over-year) is up by an astounding +50.4%. This is also the 12th quarter in a row in which earnings are exceeding sales growth, indicating an expansion in profit margins, and this is why stocks are rallying.
Contrary to August’s dismal historical record, this August could deliver a big rebound, due to: (1) the rapid growth rate of quarterly earnings, (2) the exhaustion of mean reversion algorithms, (3) the implosion of “Situational Awareness,” and (4) recognition that unscrupulous short sellers are spreading false narratives….
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