Do Stocks Have the Fuel To Move Higher?

Including this morning’s results from Deere & Company DE, Tapestry TPR and others, we now have Q2 results from 461 S&P 500 members or 92.2% of the index’s total membership. Total earnings for these companies are up +11.4% from the same period last year on +5.8% higher revenues, with 80.5% beating EPS estimates and 78.7% beating revenue estimates.

These results have been notably better than what we have been seeing from this group of companies in other recent periods.

Part of the earnings outperformance is a function of how low expectations had become ahead of the start of this reporting cycle, particularly in the wake of the early-April tariff announcements.

The earnings outperformance is much more than above-average proportions of these companies beating consensus EPS and revenue estimates, but rather reflective of an overall resilient earnings picture and in some key respects improving outlook for the back half of the year and beyond.

We see this in the favorable revisions trend for estimates for the current and coming periods, particularly for key sectors like Technology, Finance and others.

This improving earnings outlook should give investors confidence in the fundamental basis of the market’s ongoing momentum.

For more details about the Q2 earnings season and the overall earnings picture, please check out our weekly Earnings Trends report here >>>>>Earnings Outlook Remains Strong and Improving: A Closer Look

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research