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Earnings Update

By Charles Payne, CEO & Principal Analyst

Well, 24% of S&P 500 names have reported, and financial results have been on fire, but have they been good enough?  The market is in the midst of the kind of rally that must be justified daily; even then, the chorus of bears and doubters will roar their disapproval and their predictions of doom. 

The fact is that most have been standing on the doom-and-gloom soapbox for the 20,000 points on the Dow. It is of no consequence because they are always treated like Nostradamus when the market crashes.

That being said, this market has enjoyed one of the best stretches in history, especially when measured against the backdrop of zero volatility. For many investors, it just doesn’t feel right when you expect equity futures to be higher, and stocks to bolt out the gate each morning like thoroughbred racehorses. 

I understand that part. To be sure how markets act during short-term stretches can be influenced by many things, often having nothing to do with actual business fundamentals or the economy.  That’s why this earnings period is so critical. Numbers and guidance must be robust; thus far, they have been. 


I noted coming into this earnings period that my focus was on the top-line. Indeed, revenues have beaten the Street 81% of the time at a blended rate above the historical average. Top-line momentum is a great proxy for the economy and consumer confidence. 


The earnings picture is just as impressive as the top-line according to FactSet data. In yesterday’s session, 76% of S&P 500 beat the Street with a growth rate of 12%, well above the historical average. 


Charles Payne
Wall Street Strategies


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