“And I — my head oppressed by horror — said:
"Master, what is it that I hear? Who are
those people so defeated by their pain?"
And he to me: "This miserable way
is taken by the sorry souls of those
who lived without disgrace and without praise…”

-Dante Alighieri, Inferno

Since the market bottomed back in March 2009, I have been writing about the stock market’s eagerness to celebrate mediocrity.  There was a period of earnings growth, but the top line expansion has been mostly non-existent.  So, we applauded ‘green shoots’ and other microscopic signs of growth.  However, earnings started to weaken and peaked in the third quarter (3Q 14) of 2014, and they are now slipping rapidly.  The good news is the stage is set (or a cynic would say “fix is in”) for earnings surprises, even when earnings are anything but good.

So, we are celebrating mediocrity; earnings are coming in better-than-expected, even if the news for the most part is disappointing.

Apple (AAPL)

Apple blew away the consensus and headlines blared it was a “blowout quarter,” although in many respects, it was the worst quarter in many years.

US Steel (X)

When we made 25% in a few weeks, I said ‘let’s take the money and run,’ even though there were signs metals wanted to rally higher.  My angst was centered on risk management, and the idea that better demand would already be priced into the share price.  Well, it was a “blowout quarter” with the company only losing $0.31 versus the consensus of -$0.55.

Buffalo Wild Wings (BWLD)

Let’s say revenues improved 15% from a year ago, and earnings of $1.27 beat Wall Street consensus by two pennies.  Still, same-store-sales were down again; co-owned stores 2.1% and franchise-owned ones- 2.6%.

Today’s Session

Earnings for the most part continue to come in stronger than expected, but the real news is guidance hinting at noticeable improvement in the second half of the year.  Don’t get me wrong, it’s still about clearing lower expectations.  This the case with Boeing (BA), which just posted its first quarterly loss in seven years and lowered full year earning guidance to $6.30 from prior guidance of $8.35, but the street modelled for $5.34.

Boeing seeing things better than the street is a notion underscored by this morning’s durable goods report that dropped dramatically from last month but sported a silver lining in the form of business investment that had been in freefall.

$62.330 billion, +0.2%, might not seem like a major bump but that number had been in freefall since the October high water mark of $69.634 billion.