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ZERO HEDGE writes:

Heading into second quarter earnings season, it wasn’t a question of if it would be bad – we knew the Y/Y earnings collapse of more than -40% would be the worst since the financial crisis – but what hints management teams would give on the outlook to at least give the impression that things are getting better.

And that’s precisely what is taking place: according to BofA, not only has there been a prevalence of top and bottom-line beats, but when it comes to the future, management teams have never been more optimistic… literally.

Here are the facts: Through this weekend, 127 S&P 500 companies (40% of EPS) have reported, with another 37% set to report this week.

Results are tracking 2% above analysts’ expectations at the start of July, and 2Q EPS is now $23.71 (-43% y/y) after bottoming at $23. More notably, 61% of companies have beaten on EPS and sales, well above the 40% post-Week-2 average. Health Care and Tech lead in beats, but Tech is lower since earnings season began. 

Upward revisions last week were driven by better-than expected results in Health Care and Tech. Overall, 77% of companies have beaten on EPS, 73% have beaten on sales and 61% have beaten on both – well above average, where typically 40% have positively surprised on both metrics following Week 2.

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