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Market Watch Weekly | February 12, 2021 | Can't Believe We're Using This GIF For The 2nd Time...

Erik Dekker - Feb 13, 2021

North American benchmarks edged higher this week as investors continue to digest a record setting earnings season and a diminishing Covid-19 case count. It took three quarters, but the S&P 500 earnings recession is now set to end, as bottom-line results for the fourth quarter have swung to growth for the first time in a year as more companies are beating expectations, and by big margins.

With just over 60% of the 500 S&P companies having reported, 81% have beaten consensus estimates, ahead of the 75% one-year and 74% five-year averages. In aggregate, companies are reporting earnings 15.2% above expectations, better than the 11.9% one-year average positive surprise rate and the five-year average of 6.3%. Admittedly earnings season is not the most exciting topic to read, but it’s worth highlighting because even in periods of higher volatility and market uncertainty, the market is driven by earnings, which are just beginning to turn higher.

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