As Earnings Season Ends, Stocks Get Marked Down. The Good News: It Isn’t a Recession.

With only a few big names left to report, 80% of

S&P 500

companies have now delivered results, putting the index’s earnings per share on track to contract 2.2% for the fourth quarter—the first quarterly drop since 2020’s third quarter. This isn’t a surprise: Weakening profit margins have been evident in recent quarters, and many companies have warned on profits.

What is unusual is how swiftly earnings estimates contracted. Since the fourth quarter ended on Dec. 31, consensus EPS estimates have come down 1.7%, writes

Credit Suisse

chief U.S. equity strategist Jonathan Golub.