The 2Q20 earning season is now about 95% finished and not surprisingly, companies beat very low expectations by a wide margin.  In fact, 83% that have reported have been upside surprises, and companies that have reported are beating on average by over 23 percentage points.

2Q20 consensus EPS on the S&P 500 now stands at $28.20 while consensus for FY20 now stands at $133.

With less than 10% of names left to report that don’t cover much aggregate income, I don’t see these numbers going much further up.  So, getting through $29 is not really expected.

Quite frankly, relative to low expectations, the season has been a real homerun, which was my view going into the season.  There is no nice way to put this, but the profit bears completely got this wrong.

Except for the banks raising their reserves, there were few, if any, large restructuring charges taken.

Now what? 

Stimulus is likely coming within the next couple weeks and the Fed has very definitively waived the all clear sign.  Thus, the push higher should continue. 

My indicators remain VERY BULLISH, and this rally is still hated/disbelieved.  Thus, it sure looks like the risk is more UPSIDE rather than a painful down move at this point. 

Bottom Line: Stay t...

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