The third quarter earnings season begins in a couple of weeks, and as of now, S&P 500 earnings are expected to actually decline versus the third quarter of 2011. This wasn't the case when the third quarter began.
Below is a chart showing the bottoms-up Q3 earnings growth (YoY) estimate for the S&P 500 as calculated by Bloomberg on a weekly basis. As shown, at the start of the third quarter, earnings for the S&P were expected to grow at 3.8% in Q3. Estimates dropped quickly throughout July, however, as companies releasing their Q2 numbers lowered guidance pretty significantly. As of last Friday, Q3 earnings were expected to decline 2% versus a year ago.
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