The Most Important Thing Today (8/10/22)

Hello,

Let’s talk about earnings!

S&P 500 Index 2nd Quarter Earnings Summary

• Heading into the second quarter earnings season, many were concerned about companies meeting top and bottom-line expectations. The data has been mostly positive with aggregated sales improving by 2.97% over expectations and earnings improving by 4.40% over expectations.
  • Companies are beating sales estimates by a wider margin, but earnings by a lower margin than their five-year averages of 1.8% and 8.8%, respectively.
• This may be evidence that inflation and a slowing economy may not be impacting businesses as much as feared. Coinciding with the earnings releases, the S&P 500 Total Return Index was up 11.33% from June 30, 2022, to August 11, 2022.
• The data isn’t necessarily an outlier, as companies tend to routinely beat guidance. However, given the looming economic uncertainty, this period was better than expected.

Source: Helios Quantitative Research, Bloomberg, FactSet

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Sincerely,

Your friends at Helios Quantitative Research