tHe cOnSuMeR iS hUrTinG
Gents, Ladies —
Factset:
- Overall, 88% of the companies in the S&P 500 have reported actual results for Q2 2026 to date. Of these companies, 86% have reported actual EPS above estimates, which is above the 5-year average of 78% and above the 10-year average of 76%. If 86% is the actual number for the quarter, it will mark the highest percentage of S&P 500 companies reporting a positive EPS surprise since Q2 2021 (87%). In aggregate, companies are reporting earnings that are 29.2% above estimates, which is also above the 5-year average of 7.0% and above the 10-year average of 7.4%. If 29.2% is the actual number for the quarter, it will mark the highest earnings surprise reported by the index since FactSet began tracking this metric in 2008.
- Ten of the eleven sectors are reporting year-over-year earnings growth. Eight of these ten sectors are reporting double-digit growth, led by the Energy, Communication Services, Consumer Discretionary, Information Technology, and Materials sectors. On the other hand, the Health Care sector is the only sector reporting a year-over-year decline in earnings.
- In terms of revenues, 76% of S&P 500 companies have reported actual revenues above estimates, which is above the 5-year average of 70% and above the 10-year average of 68%. In aggregate, companies are reporting revenues that are 3.2% above the estimates, which is also above the 5-year average of 1.9% and above the 10-year average of 1.6%. If 3.2% is the actual number for the quarter, it will mark the highest revenue surprise reported by the index since Q2 2022 (also 3.2%). Again, historical averages reflect actual results from all 500 companies, not the actual results from the percentage of companies that have reported through this point in time.
- Excluding Alphabet and Amazon.com, the blended earnings growth rate for the S&P 500 for Q2 2026 would fall to 32.0% from 50.4%. However, this would still mark the mark the second consecutive quarter of earnings growth above 25% and the seventh consecutive quarter of double-digit earnings growth for the index.
In addition to RECOURD earnings, we have the tariff refunds steaming in to provide a little extra dry powder for our wonderful corporations. After all, corporations are people too.
- As of early August 2026, roughly $100 billion has been refunded or sent for disbursement to importers, according to the latest court filings. The total pool is estimated at approximately $166 billion, excluding interest, meaning roughly 60% has already moved through the refund process.
The bear case now lies almost exclusively inside of some of your brains — visions conjured up in the middle of the night — awoken by nightmares of black smoke and red flames, chards of metal bustling through your city squares. The line that is often bandied about by many a bearshitter is the poor consumer — “oh the consumer and his spending thrifts wreaking havoc upon America.”
Or not.
Haves
Have nots
What about the AI trade — what about software?
Software is now ripping whole tits off after it was revealed that Dario from Anthropic is a fucking idiot and all of the numbers, save HUBS, have crushed. The AI/semi trade rebounded the past 2 weeks, but not at the ribald levels of before the correction, with funds dispersing into practically every corner of the market, even secular.
The NASDAQ is now 3.25% off fresh highs and the semis are -13% off their previous high water mark — with the SPY pinned to brand new recourd highs.
During this quarterly earnings season it was revealed that capex is in fact not slowing, but continuing higher and, moreover, in the case of MSFT and AMZN — ROI is starting to progress. The big bet here, obviously, is that all of this capex is either going to flop out and collapse their balance sheets, or lead to an earnings ramp never seen before. At this point, I have no interest in trying to convince you of what I think, since many of you are blockheaded retards anyway.
Into the final weeks of summer, we are likely to consolidate recent gains, after bearing witness to the NASDAQ printing fresh all time highs — effectively popping champagne corks into the faces of all of those people clamoring for more pain.
One last thing, the July jobs report showed a loss of 23,000 jobs, with more than 50,000 coming from the government. This soft data has created a collapse in FOMC rate hike chances in September, going from 67% chance to just 44%. Some of you have reached out to me to all but gurantee rate hikes, stemming from your mental ailments and proclivity to want pain and suffering. In my estimation, there is a better chance of Martians invading Earth and vaporizing congress than Warsh hiking rates ahead of the midterms.
Good Day.
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