86 companies have reported earnings for the 3Q23. 79% of them have beaten (watered) expectations on earnings, and only 59% have beaten on revenues. The market reaction, however, has been negative for both groups, the ones that were above expectations and below. But as you can see in the chart below, the median underperformance of the ones that have not beaten earnings has been the worst of the last 5 years. It would appear that the market is starting to be more demanding when it comes to new flows in an economic context of high and growing levels of debt and two wars. Also, the impact of restrictive monetary policy and quantitative tightening might be weighting on liquidity, not as abundant as before, and consequently, fewer bullets are reserved for winners. Since the market is concentrated on 7 names, the well being of the index is attached to those earnings reports.
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