- With 90% of S&P 500 companies having reported Q3 results, S&P 500 earnings per share (EPS) growth is tracking to roughly 8% year over year excluding Boeing (BA) losses and Apple's (AAPL) substantial European tax settlement.
- The average company has exceeded earnings targets by a solid 4.4%. Consumer discretionary, healthcare, and industrials have produced the biggest average upside surprises. Stable margins, despite the drop in energy sector profits, are impressive.
- Forward estimates for the S&P 500 have fallen just 1.2% since October 1, less than the typical 2–3%. Estimates have held up best in the communication services, consumer discretionary, and financials sectors.
- Corporate America has shown off healthy earnings power this quarter, helping support the continuation of the bull market and justifying elevated valuations while macroeconomic conditions are favorable.
