More than 2,000 companies have now reported their Q2 earnings results since early July, including 422 S&P 500 companies. Below we show the average one-day price change for stocks on their earnings reaction days broken out by sector and whether the stock is in the S&P 500 or not.
The average S&P 500 stock that has reported has gained 0.44% on its earnings reaction day this season, while the average non-S&P 500 stock has averaged a gain of 0.51%. While these two numbers are very close to each other, the performance numbers differ significantly when looking at individual sectors.
For example, the average non-S&P 500 Technology stock that has reported has gained 0.95% on its earnings reaction day this season, while the average S&P 500 Tech stock has actually fallen 0.60%. Tech has been the worst sector in the S&P 500 this season when it comes to stock price reactions. Investors have been “selling the news” for large-cap Tech, but they’ve been buyers of Tech at lower market cap levels.
The same is true for Financials, Energy, and Consumer Discretionary. S&P 500 stocks in these three sectors have averaged declines on their earnings reaction days this season, but non-S&P 500 stocks in these sectors have averaged gains. Non-S&P 500 Consumer Discretionary stocks have gained an average of 1.34% on their earnings reaction days, which is the second best of any sector.
On the flip side, Utilities, Health Care, Real Estate, and Materials stocks in the S&P 500 have averaged gains on their earnings reaction days, while non-S&P 500 stocks in these sectors have averaged declines.
The only two sectors where investors have been big buyers on earnings regardless of market cap is Industrials and Consumer Staples. Stocks in these two sectors have seen huge gains this earnings season. The average Industrials stock in the S&P 500 has gained 2.42% on its earnings reaction day, while the average Consumer Staples stock in the S&P 500 has gained 2.62%. Non-S&P 500 Industrials and Consumer Staples stocks have gained 0.78% and 1.90%, respectively, on their earnings reaction days.