Positive Earnings Surprises Continue

Last week I compiled a mid-reporting season earnings report card, in order to get a feel for the only data point that really matters for stock prices: earnings. As we move closer to the end of earnings (which is defined by SEC filing deadlines -- for this quarter, August 15), let's update our view, and thus also our Q3 outlook. We will look at large caps today and small caps on Monday.

At this point, 83% of the S&P 500 companies have reported; the table below highlights the winners and losers. Keep in mind that I favor earnings surprises over absolute numbers or even growth rates.  To make money in stocks, you need a variant view relative to the market as a whole -- you are not going to get paid to just run with the herd. I find surprises to be the best tell for where expectations are wrong. (This analysis uses the EPS estimate as of five weeks ago, in order to screen out recent changes, pre-announcements and other manipulations.)...338 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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