Backward-looking earnings are fine. BofA:
Better-than-feared 3% beat; guidance surprisingly positive279 S&P 500 companies comprising 71% of index earnings have reported. 2Q EPS is tracking a solid 3% beat at $56.87 vs. consensus $55.35, while 2H EPS has been revised down 2% since July 1. Overall, results were better than feared, especially with more above-consensus guidance than below, which was the biggest positive surprise (Exhibit7). But we are still in the very early innings of downturn and estimate cuts. Moreover, only 60% of Consumer Discretionary earnings have been reported, the sector under pressure the most. Continued strength in the USD(+15% YoY so far in 3Q vs. +13% in2Q) also remains a headwind. Rewards for beats have been more muted, while misses were penalized similar to the historical average (Exhibit 31).
Was June low the big low? We need more EPS cuts
