Tuesday, November 20, 2018

Good News, Bad News on Earnings

Earnings for S&P 500 companies grew by a robust 25.8 percent in the third quarter. That was the strongest performance for this figure since the third quarter of 2010, when companies benefited from very attractive, recession-era comparable earnings.

Nevertheless, all the major indexes have been falling. From the start of earnings season to the end of last week, the S&P 500 index  has fallen 2.7 percent, the Dow Jones Industrial Average 1.1 percent, and the Nasdaq Composite Index 5.5 percent.

Illustrating this trend is Apple, which announced that it was going to cease reporting the number of iPhones and other products it sells. As a result of that, rather than the earnings statement itself, Apple shares are off 11.6 percent since the end of October.

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