Earnings Update: As Expected, Companies Beat Expectations

Will the stock market rally continue? That’s a big question right now, and the answer will depend on two things:

• Whether the fundamentals (i.e., corporate earnings) continue to improve
• Whether investor confidence continues to rise, driving valuations higher

The signs on the latter look good. So today, we’ll take a last look at earnings for the fourth quarter of 2016, to see what the results can tell us about the future.

How did we do?

About six weeks ago, I wrote about how I expected the earnings season to evolve. At the time, only 6 percent of companies had reported, and earnings were expected to rise by about 3.2 percent. Based on past earnings misses, I argued that we could come in as high...