S&P 500 earnings have been as bad as feared, even as the beat rate has improved

This week could turn the earnings tide in either direction, as more than a third of S&P 500 companies will report results

Companies are beating expectations at a relatively good pace, but investors shouldn’t take that to mean earnings season has been better-than-feared, with the year-over-year decline in profit and sales roughly the same as it was before the season kicked off.

That is with 128 companies in the S&P 500 , or about 25%, having reported results through Friday.

The outlook for the earnings season could take a turn in either direction during this week, in which 184, or about 36% of the index, reports results.

That includes three of the four largest U.S. companies by market capitalization — Apple Inc. AAPL, Amazon.com Inc., and Google parent Alphabet Inc. GOOGL, — all reporting after the July 30 close.

A lower bar set by the COVID-19 pandemic has allowed more than 80% of the companies reporting so far to beat earnings-per-share estimates,

THAT"S WHY I'M MORE CONCERNED WITH YEAR OVER YEAR RESULTS NOT JUST BEATING ESTIMATES

The current blended year-over-year growth estimate for earnings per share, which includes results that have already been reported and the average analyst estimates of coming results, is negative 42.4% through Friday, according to FactSet. That includes a 42.8% drop in already reported results. The decline is on track to be the biggest since the fourth quarter of 2008, in the midst of the financial crisis.

Of the 11 S&P 500 sectors, 10 are showing negative earnings growth rates, which compares to all 11 sectors showing declines before the start of the reporting season.