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
The full text of this article is available to MacroBusiness subscribers
