Sector Earnings Beat Rate and Stock Performace

The current earnings per share "beat" rate this earnings season is 73% for all US stocks.  Below we highlight the percentage of companies in each sector that have beaten estimates.  As shown, only three sectors have a higher beat rate than the overall market -- Materials (76.7%), Consumer Discretionary (83.7%), and Technology (87%).  Two of the three sectors that are beating estimates at the highest clip are also the two sectors that have gone down the most since earnings season started.  Materials is down the most at -11.37%, while Technology is down 7.72%.  Based on this, either investors aren't paying any attention to the strong earnings, or they think that it can't get much better than this, hence sell the news.  It's probably a little bit of both.  However, guidance has been especially strong as well this earnings season, so the jury is still out on whether the earnings cycle will now turn down.

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