We are off to a very good start in the Q3 earnings season, with the big banks not only beating estimates but also providing a reassuring outlook for the coming periods.

We will be closely watching for confirmation of the positive revisions trend that has been in place ahead of the start of this earnings season. Unlike the typical revisions behavior in the post-Covid period, Q3 estimates went up since the quarter got underway, with key sectors like Tech, Finance and Energy enjoying positive estimate revisions.

In terms of the Q3 earnings season scorecard, we now have results from 49 S&P 500 members. Total earnings for these 49 index members are up +16.5% from the same period last year on +8.2% higher revenues, with 83.7% beating EPS estimates and 81.6% beating revenue estimates.

This is better performance from these S&P 500 members relative to what we have seen from this group of companies in other recent periods, particularly on the revenue side. It is still early in the Q3 reporting cycle, but there is clearly momentum on the revenue side from what we have seen already.

We will need positive guidance  and management commentary to help sustain the favorable revisions trend that has been in place in recent months. An improving earnings outlook will help validate the market’s solid gains this year. To that end, we have made a very reassuring start to the earnings season.