Schwab's Kevin Gordon says investors are rewarding S&P 500 earnings beats less

According to CNBC, S&P 500 companies that beat Wall Street earnings estimates are being rewarded less than usual this season, with the average stock in that group slipping about 0.2% the day after reporting, according to a Charles Schwab data analysis. In an average quarter since 2017, such companies have gained about 0.6% after earnings, and Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research, said investors appear to be taking profits on some of the market's high flyers after results. He said the pullback looks more like a pause than a broader warning sign, noting that earnings breadth remains strong and that traders should view conditions as highly rotational rather than correctional. Gordon added that more than 87% of the nearly 16% of S&P 500 companies that had reported by Wednesday afternoon beat expectations, according to FactSet data. He said he will watch consumer-facing companies for signs of how shoppers are coping with higher energy prices and the prospect of higher borrowing costs, while next week is set to be the busiest of the season, with more than one-third of the S&P 500 scheduled to report, including Amazon, Apple and Ford.