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BEHIND THE MONEY: Analysts Give Companies Easy Earnings Ride

There was a great Monty Python sketch called the "Twit Olympics" where one of the events entailed jumping over a row of matchbooks. Perhaps that's what we should rename this earnings season after looking at the parade of earnings beats this morning, which follow the incredible estimate-pounding performance so far this season.

For example, Caterpillar reported a profit of 64 cents a share, compared to the Thomson Reuters consensus estimate of 6 cents a share. Were Caterpillar analysts asleep at the switch? Maybe, because despite a 60 percent jump in Caterpillar shares in the quarter, they didn't raise their forecast one iota, according to Birinyi & Associates.

It seems that was the trend for the whole market too. As the S&P 500 surged 15 percent in the third quarter, analysts kept lowering their earnings estimates for the period. They expected a 21% drop in earnings for the quarter on July 1 and bumped that down to a 25% decline by the time the quarter ended, with the biggest downward revisions coming in the financial, industrial and energy sectors, according to Thomson Reuters. The biggest surprises we've seen so far have come from those sectors in Goldman Sachs last week and Caterpillar today.

Jon Najarian, co-founder of Optionmonster.com, said this makes sense because since analysts set the bar so low, the so-called whisper numbers out there are much higher this reporting season then he can last remember.

The Fast Money traders keep bringing up on our conference calls how one concern of theirs is that the momentum of this market rebound continues to confound credible strategists they follow, such as Doug Kass, President of Seabreeze Partners and T2 Partners' Whitney Tilson, that have called for its end. Maybe this relentless rally is puzzling because the numbers it's based upon aren't as good as they appear.

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Trader disclosure: On Oct. 20th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman's Firm Owns (BAC) Preferred, (BAC) Call Spreads, (BAC); Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm Owns (TGT); Finerman's Firm Owns (UNH) Calls; Finerman's Firm And Finerman Own (WFC) Preferred; Finerrman's Firm And Finerman Own (WMT); Finerman's Firm Is Short (UNG), (IJR), (MDY), (SPY), (IWM), (USO); Finerman Owns (AAPL); Najarian Owns (BX) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (LAZ), Is Short (LAZ) Call, Owns (LAZ) Puts; Najarian Owns (MGM) Calls; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), Is Short (YHOO) Calls; Najarian Owns (TEX) Call Spread; Finerman's Firm And Finerman Own (FLS); Finerman's Firm Owns (DRI); Seygem Asset Managemnet Is Short (PBR); Seygem Asset Management Is Short (EWZ); Seymour Owns (CHL), (EWZ), (AAPL), (BAC), (CAT), (MGM)

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