With most of the big names reporting, earnings season has been better than expected. So why aren’t we happy?
In what some feared would be a bloody earnings season, Wall Street so far has not merely survived but has thrived, writes CNBC’s Jeff Cox, as banks largely lived up to lowered expectations and confidence grew that the worst may be close to passing.
That’s solid analysis, if we don’t say so ourselves, and we’d like to take Mr. Cox’s observations a step further.
If you remove the financial services sector, S&P 500 earnings surged about 7.8% year over year.
But if you remove the energy sector, S&P 500 earnings contracted around 25.8%. And in the financial services sector, the S&P earnings were expected to go down 60% but instead they actually went down 90%.
The market needs to do more than beat lowered expectation, says Jon Najarian on Fast Money. Companies need to turn themselves around and get themselves into positive territory. But I think Prudential has the potential to do that. Keep your eye on it, he says.
Two others I’d look at are Tesoro and Valero, Najarian counsels. I like the outlook going forward.
I like Valero too, adds Joe Terranova.