With 88% of S&P 500 companies having reported second-quarter results, FactSet data shows that 86% have beaten earnings expectations and 76% have topped revenue estimates. Meanwhile, blended earnings growth has reached 50.4% year-over-year. If that figure holds through the end of reporting season, it would mark the strongest quarter for S&P 500 earnings growth since Q2 2021.
Of course, record highs do not mean the road ahead will be perfectly smooth. Questions surrounding interest rates, inflation, geopolitical developments, and day-to-day market volatility remain very much alive. The bigger question is whether those concerns are enough to derail a market still supported by strong corporate fundamentals.
Oppenheimer’s chief investment strategist John Stoltzfus certainly has a view, writing, “The outlook appears to look ‘a heck of a lot better than worse’ to us, notwithstanding plenty of noise throughout recent weeks raising levels of volatility in the stock, bond, and commodity markets… The day-to-day action in the markets continues to often run contrary to positive fundamentals (both economic and corporate) that remain resilient in offsetting challenges and concerns that have in our view served to give bears, skeptics, and nervous investors opportunity to take some profits without FOMO on some days in what appears to us to be a secular bull market with legs to continue to climb the proverbial wall of worry.”
