Earnings Season update - April 29th
Bottom Line: With stock market records being reached within the past week and the mid-point of earnings season on us this week, it’s a good time to see what’s really going on with corporate America. You might have guessed that with the outstanding first quarter growth rate, 3.2%, companies would be doing much better than expected and you’d be right. Here’s the current scorecard for companies that have already reported.
- 46% of companies have reported
- 77% have reported positive earnings surprises
- 59% have topped sales targets
And that’s how we’ve gone from a stock market with declines of around 20% from all-time highs in early January – to record highs heading down the home stretch of April. Consumer spending drove the economy in the first quarter and we’re seeing that in the earnings reports from companies as well. Companies that are considered “consumer discretionary”, like retailers have been among the biggest surprises this earnings season. This is a huge week for earnings as a third of S&P 500 companies will report for the first quarter. Given what we’ve already seen and on back of the phenomenal first quarter economic growth, there’s plenty of room for optimism for investors and the overall economy at the moment.