BEHIND THE MONEY: Surprise is in the Air Following Wells Fargo, Goldman and J&J

Following earnings beats by Wells Fargo , Goldman Sachs and Johnson & Johnson , positive profit surprises are certainly in the air along with spring.

Stocks recovered late yesterday in anticipation of Goldman's blowout numbers and now are off their lows today ahead of Intel's report after the bell. The world's largest chipmaker was positive out of the gates early in a down tape.

David Kostin, Goldman Sachs portfolio strategist, wrote to clients this morning about the surprise phenomenon and other ways to gauge the market's response to earnings seasons.

"During the current pre-season, analysts have significantly revised down first quarter EPS estimates, suggesting that significant earnings surprises may occur during the earnings season," writes Kostin, referring to the well-known practice of CEOs "talking down" numbers.

Given the rhetoric to begin the year from CEOs and the President, it does seem reasonable to think stocks a month ago priced the worst-case scenario in and then some.

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