Are you surprised that the market is acting as well as it has lately, especially with earnings season having begun? Still waiting for that overbought correction after six weeks of gains in stocks? Me too. Why the relative strength? Well, according to Bespoke Investment Group first quarter earnings are coming in well above estimates so far (20% reporting):

“A fifth of the companies in the S&P 500 have reported earnings for the first quarter, and so far earnings are down 16.6% versus the first quarter of 2008.  While down, this is much better than the -37.3% expected at the start of earnings season.  When comparing actual earnings versus estimates, Consumer Discretionary, Financials, and Energy are leading the way.  On the downside, the Industrial sector is the only one where actual earnings have come in weaker than expected.  Earnings season still has a long way to go, but the fact that growth has come in better than expected thus far has been one factor driving the market higher.”