Market Extra: U.S. companies are off to a strong start this earnings season. Here’s what it will take for stocks to rally

by | Oct 19, 2022 | Stock Market

U.S. stocks have advanced since the start of the week as the third quarter earnings reporting season has gotten off to a strong start, with the big banks and other large firms surpassing analysts’ expectations. However, whether or not stocks can pull off a rebound over the coming weeks will largely depend on how the largest publicly-traded companies in the U.S. have fared during a difficult quarter that has seen the value of the dollar surge and inflation climb to its highest level in four decades.

So far, 64 S&P 500 components have reported third-quarter earnings, according to FactSet. That’s nearly 13% of the 503 index components. Of these, more than 70% have reported a positive surprise, compared with 25% that have missed expectations and nearly 5% who have reported in line, according to FactSet data. Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said the strong earnings so far have been particularly notable in light of the tepid expectations heading into the end of the quarter. “So far this earnings season is starting like last earnings season. We expected earnings to really dive, the whisper numbers were terrible. Then it opens up with the banks and 18 out of 24 financials …

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