Strong Performance on Earnings

Much has been made of the weak earnings numbers that companies are posting this reporting period, but don't tell that to investors.  Shareholders have been driving prices higher when companies have reported this earnings season.  As shown below, the average stock that has reported since earnings season began on July 10th has gained 0.70% on its report day (for companies that report after the close, we use the next day's change).  If the season were to end today, this would be the best performance stocks have seen on their report days since Q4 2010.

Last year at this time, companies were reporting very weak earnings just as they are now.  But last year, the average stock was falling nearly 2% on its report day in reaction to the news.  This was the worst performance we've seen during an earnings season since we've been tracking the data.  With the average stock gaining on the news this year, it looks like investors already priced in the weakness this time around.  Fool me once...