Profit surprises are normalizing — and that may signal a healthier stock market, say Citi strategists

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Citigroup says the third-quarter earnings season has established a “new normal” in which companies are beating forecasts less strongly than in recent quarters. After more than 88% of S&P 500 companies reported results, 84% posted earnings per share above consensus, compared with the five-year average of 78%. However, those companies’ earnings exceeded estimates by an average of only 2.6%, below the five-year average of 7.5% and well short of roughly 23% a year earlier. This normalization of earnings surprises could signal a healthier stock market.

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Telemac
Telemachttp://cryptoinfo.ch
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