Corporate earnings from the holiday period have been overwhelmingly better than expected so far, and the busiest week of the season is expected to include more big numbers.
Of the 37% of S&P 500 SPX, +1.61% components that have reported earnings for the fourth quarter, 82% have surpassed the consensus forecast. If the remaining companies continue to beat at that level, it would mark one of the best beat rates since FactSet started tracking the metric in 2008. Only the second and third quarters of 2020 saw higher beat rates, with both coming in at 84% amid pessimism about performance during the early days of the COVID-19 pandemic.
It’s typical for companies to beat earnings estimates in aggregate, but the high proportion of beats so far this season is notable because it could break the S&P 500 out of its latest earnings recession. The index is now predicted to record a slight profit decline of 2.3% for the latest period, down from a projected 9.3% at the end of the fourth quarter. Read more…..
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