Arc Radio 6.12.26

I was reading something from FactSet last night.

More than three quarters of the first quarter earnings reports from S&P 500 companies were positive surprises.

and this in a quarter with an oil shock.

I haven't gone back and looked at what they wrote about the tariff shock and if those two resulted in positive surprises.

I'm also looking at the volatility of auto stocks.

That's just a proxy of maybe earnings surprise, negative earnings surprise, or even positive.

And that's pretty stable as well.

And so I think a big research question, and my analysis is very incomplete, and it'll probably take time for economists to figure this out.

is why these shocks aren't translating more into the P&L of companies, or how is it in such a way that they're able to preserve earnings growth? I just don't understand it.

Maybe one answer is declining labor share, maybe, but I'll leave it right there and toss it to you.

I was reading something from FactSet last night.

More than three quarters of the first quarter earnings reports from S&P 500 companies were positive surprises.

and this in a quarter with an oil shock.

I haven't gone back and looked at what they wrote about the tariff shock and if those two resulted in positive surprises.

I'm also looking at the volatility of auto stocks.

That's just a proxy of maybe earnings surprise, negative earnings surprise, or even positive.

And that's pretty stable as well.

And so I think a big research question, and my analysis is very incomplete, and it'll probably take time for economists to figure this out.

is why these shocks aren't translating more into the P&L of companies, or how is it in such a way that they're able to preserve earnings growth? I just don't understand it.

Maybe one answer is declining labor share, maybe, but I'll leave it right there and toss it to you.