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t’s all about corporate earnings at this stage. And on that count, it’s not so much about how companies do relative to third quarter expectations, but rather what kind of guidance they provide for the fourth quarter and beyond. The earnings-related anxiety so much on display in recent days primarily reflects how the earnings picture will evolve as a result of this earnings season.

We don’t have any discernible trend emerging as yet at this admittedly early stage, but do the stronger-looking earnings reports from banking bellwethers J.P. Morgan (JPM - Analyst Report) and Wells Fargo (WFC - Analyst Report) tell us anything about the broader third quarter earnings season? Of the two results, J.P. Morgan clearly came out ahead of expectations and has strong results, but we can’t say the same about Wells Fargo.

The funny thing is that of the two banking giants, it is Wells that resembles more a traditional banking entity, not J.P. Morgan. As the 'London Whale' episode of the recent past shows, J.P. Morgan is too complex of a banking institution for investors to properly size up. As such, while a solid earnings beat from J.P. Morgan is welcome, it doesn’t tell us much about how the earnings season will unfold.

We should also keep in mind that the Finance sector as a whole is expected to produce strong earnings growth in the third quarter, as it did in the previous one. Total Finance sector earnings in the third quarter are expected to be up 14.2% from the same period last year, the second-highest growth expected of any of the 16 Zacks sectors.

 Construction is expected to have the highest earnings growth rate at almost 45%, but Construction is too small a slice of the total earnings pie at less than 0.5% of the total, whereas Finance is the second largest earnings contributor, after Tech, at almost 18% of the total. Excluding the strong growth contribution from Finance, the roughly 3% decline in total 3rd quarter earnings drops even further to about 7%.

As I have stated in this space in the past, the key take-away from this earnings season will be how it shapes our expectations for the fourth quarter and beyond, which seem unreasonably elevated at this stage. The earnings anxiety referred to above is primarily about how the earnings outlook for the fourth quarter and beyond will shape up as a result of this earnings season. Today’s J.P. Morgan result is welcome, but doesn't help much in addressing the anxiety.

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