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“The problem with socialism is that you eventually run out of other peoples’ money.” – Margaret Thatcher

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

We’re now in the back half of the Q3 earnings season, and probably the most consequential data point we’re seeing coming out of this season is continued strength in forward guidance.

Last earnings season was the first one following the tariff tantrum of the spring, and investors were pleasantly surprised that more companies raised guidance than lowered guidance.  That trend has continued in a big way this season, and with more than 1,000 companies reporting Q3 numbers thus far, we’ve seen 14% raise guidance compared to just 6% that have lowered guidance.  As shown below, our guidance spread chart, which shows the percentage of companies raising minus lowering guidance on a rolling three-month basis, has spiked to a level we’ve only seen once before, which was the period coming out of the COVID Crash in 2020.  These big spikes in guidance have historically happened in the early part of periods following max uncertainty.