Backward glances often reveal that old news is never real.

The better part of the first half of this year was filled with the same never-ending stories from the buzzing hive of hot air experts; reports and predictions arriving online and offline, attempting to make us lose our minds before leaving our minds.

Earnings, they said, were going down.

Revenues too.

The recession was no longer a possibility but either, a) here or b) almost here.

And the trainload of salt rolled on.

The fact?

Well, the "terrible earnings turn" - with 96% of the S&P 500 reported – at this stage of the Q2 earnings season compared to the same point during Q1 show that:

• Revenues are beating by a greater amount.
• A higher percentage of companies are reporting positive earnings surprises.
• The earnings surprise is a tad smaller.
• Year-on-year earnings growth is only 1.5ppts lower – that includes Boeing’s Q2 results.

Of the 482 S&P 500 companies reporting through midday on Monday, 74% have exceeded industry analysts’ earnings estimates.

Collectively, they have averaged a year-on-year earnings gain of 1.6% - exceeding forecasts by an impressive 6.0%.

And if we take out the impact of just one of those companies (Boeing) the overall Q2 earnings growth rate doubles to 3.2%!

Does it Stop There?

On the revenue side, 57% of companies beat their Q2 sales estimates so far, with results coming in an impressive 1.2% above forecast and 3.8% higher than a year earlier.

Remember that just a year ago we had a huge bump from the new tax bill. Beating those numbers at all is a huge benefit given the garbage going on in trade and the never-ending political hatred.

Q2 earnings growth results are positive year-on-year for 65% of companies, versus a lower 64% at the same point in Q1. And Q2 revenues have risen year-on-year for 67% versus a slightly higher 68% during Q1.

Keep in mind that Q1 of 2019 had marked the 11th straight quarter of positive year-on-year earnings growth and the 12th of positive revenue growth.

But there have been no large font headlines about any of this. Instead it’s, “Hey, We Totally Blew It - Earnings DID Grow After All".

Makes you wonder what of today’s “real news” will pan out as fool’s gold tomorrow.

Methinks “Far too much of it.”

The Summer Stock Market Swoon is Right on Time

You can set your clock by it.

Mind you, in previous years we did not have a Twitter President messaging his personal and political whims and whinges.

Nor did we have 24-hour, non-stop, relentless coverage of every breath taken, body movement made, frown worn, or word spoken by El Presidente de la Pared (of the wall).

And double nor on such a divided press corps (corpse maybe?) who seemingly work overtime to ensure they publish: “All the News That’s …Fit to Win Eyeballs for Ad Revenue.”

All those Scribblesaurus Wrecks aside, the raw fact of the matter is that things are good. In fact, with the exception of just a very few items, things are generally excellent.

The next decade will bring even more opportunity, unless you keep buying into the fear.

Long Trade Ranges Are Gifts

Because of the massive deflationary forces underway and the even more mahoosive pipeline of lifestyle and generational demand coming our way, everything we know is gonna change.

Inflation fears will change, and with them deflation will be bad too. Our view of an inverted yield curve will change (bad too). And when that curve bends the other way, it’ll be reported as even worse.

Despite margins surprising to the upside as the Gen Y tide rises into the system and every company has tech at its centre, that will also be a really bad thing.

And muddling along as we apparently have will be fabulous everywhere, except in the headlines.

So, here’s what you want to focus on.

Thanks to Bespoke for the chart (below) which shows trade ranges and their purpose and benefit as seen with the 200-day moving average of the stock market:

This should drive home a few points about trade ranges:

• They’re not new (the grey shaded areas mark the three major ones since the March 2009 Apocalypse Lows).
• They perform a service for long-term investors.
• They tend to break to the upside, not downwards.
• They stink while they’re happening.
• They provide long-term investors the opportunity to watch the equity market become much less crowded.
• They make prices cheaper at times if you can stand the boredom.
• They reset "risk expectations" so they can be beaten again going forward.
• They always define "volatility" incorrectly as something you should be afraid of.
• They make the future "cloudy" again - which almost always shuffles out the weak hands.
• They push the masses back into the fear-zone, and then coax them back in over the years ahead as prices rise.

And as the coup de grâce the fear-zone parameters are reset as markets rise, usually reaching their bounds at higher and higher levels.

Good Evidence

Here are a few important data reads of late – all of which have happened during this so-called terrible trade war:

The perfect match to these types of positives is the raging fear felt by investors as the Dow Jones "plummeted" last Friday to a closing level of 25,650 (or so).

Hasten Ye Not to the Problems

Folks, the first time anyone ever saw the Dow Jones at 25,000 or higher was in January 2018.

The aforementioned trade range has been underway since that time.

So, in essence we’ve gone nowhere.

Except about 20,000 points higher than we were 10 years ago.

Enjoy the sun.