More than 80% of the S&P 500 index’s companies have reported second-quarter results so far, and at least five key takeaways have emerged — including that Wall Street was far more worried about the coming earnings season than it needed to be. That doesn’t mean investors were wrong; the numbers and management commentary have confirmed that inflation, the supply chain and weakening demand have continued to act as headwinds, and may continue to do so for the foreseeable future. So while investors may have been too pessimistic heading into earnings, it’s still too soon to suggest they could start being optimistic.
When J.P. Morgan Chase & Co.
JPM,
+3.10%
kicked off earnings reporting season on July 14, the S&P 500
SPX,
-0.51%
had tumbled more than 10% amid a five-day losing streak to a 17-month low, as part of a bear-market selloff of more than 20% from the Jan. 3 record close. The worry was that not only would continued high inflation, supply chain disruptions and the strong U.S. dollar crimp second-quarter results, but that growing fears of a recession would trigger sharp cuts to forward guidance. Since the July 14 close, however, the S&P 500 has bounced back by more than 10%, …