
What should you do when in the middle of an earnings recession? Set your expectations low and tune into the beats, at least that seems to be the theme this earnings season. Analysts typically become more bearish heading into earnings season; however, this quarter it appears as though they may have been overly pessimistic. As a result, of the 166 S&P 500 companies to report Q1 2016 earnings so far, 75% beat the street’s expectations. If this continues, it will be the highest percentage of over- performance since Q1 2010, when 78% reported above estimates. Exhibit 1. S&P 500: Q1 2016 Blended