Earnings Beats Are Barely Rewarded, While Misses Unleash Hell

It hasn't been a bad earnings season so far, in fact quite the opposite when compared to recent fare; and yet, it if feels as if companies have gotten slammed far worse this quarter than in recent quarter, it's because that's exactly what has happened.

First, the big picture: we are in the busiest weeks of the Q3 reporting season, with nearly 40% of companies having reported in both the US and in Europe so far. Specifically, 245 S&P 500 companies have reported 3Q results (59% of total market cap, and another 23% of cap reports next week).

US corporates are faring better than their European counterparts, in line with the more pronounced activity weakness seen in Europe.