Third-Quarter “Beat Rate” Update
As Louis said on Wednesday, the revenue and earnings “beat rates” are two key metrics you should be following closely right now. These show the percentage of companies that are beating analysts’ expectations for sales and profits.
When it comes to the earnings beat rate this quarter “any reading above 60% should propel stock prices higher,” Louis said.
And we’re off to a good start there, with exactly 60% of S&P 500 firms reporting better-than-expected profits this quarter, according to Thomson Reuters.
Revenue is another story, though.
Currently, the revenue beat rate has clocked in at 41%, while Louis says that “any reading above the long-term average of 61.8% should prove to be another catalyst for higher stock prices.”
So let’s hope we see that number trend higher this week.