The U.S. earnings season is over bar a handful of firms. It has been robust to say the least: Thomson Reuters Proprietary Research calculates that S&P 500 companies overall had second-quarter earnings growth of 38.4 percent. That was 11 percentage points higher than people had been expecting heading into the season.
There may be more surprises ahead — although which sort, remains in question. The research suggests that analysts still expect solid growth in the coming quarters and that the decline in U.S. economic strength over the summer has not changed their minds much.
There is little doubt that the latest U.S. earnings season has been a good one for long-equity investors. Thomson Reuters Proprietary Research calculates that with 67 percent of S&P 500 companies having reported, EPS growth — both actual and that still forecast for those who have not filed yet — has come in at 36 percent.
Furthermore, a large majority of the reports have surprised on the upside, as they like to say on Wall Street. Some 75 percent of reports have been better than expected. Not surprisingly, the S&P index gained around 6.9 percent in July and is up another 1.7 percent in the first two trading days of August.