Macro Minutes: Q3 Earnings vs. Expectations

In our most recent Macro Minutes video, Fisher Investments’ Research Analyst Tom Cole reflects on the resiliency of Q3 corporate earnings despite supposedly dour outlook and discusses expectations moving into Q4.

• Earning’s expectation for Q3 and Q4 fell heading into the earning’s reports, marking a pessimistic shift in investor sentiment and leaving a low bar for companies to clear.
• With expectations falling and economic conditions better than most appreciate, there is opportunity for an upside surprise for Q4 earnings results.
• Small earnings declines, such as those predicted today, often lead to positive forward returns as markets begin to discount improving earnings over the new few quarters.