Welcome to Thoughts on the Market.

I'm Mike Wilson, Chief Investment Officer and Chief U.S. Equity Strategist from Oregon

Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about

the latest trends in the financial marketplace.

It's Monday, August 2nd, and 11.30 AM in New York, so let's get after it.

With second quarter earnings season wrapping up, we can definitely say the results have been

terrific.

In fact, we've never seen companies beat consensus forecasts by such a wide margin when estimates

were already at all time highs.

Instead, the only time companies typically beat estimates by this much is when we're

exiting a recession and estimates are very low.

Taking it one step further, our analysis suggests earnings or vision breath has never been

higher.

What this means is that there are more analysts taking forecasts up and down than we've

ever observed.

This measure is a mean reverting series, so extreme should always be faded.

Of course, it's natural for analysts to be more bullish when things are good.

As a comparison, we observed the exact opposite last year when the pandemic lockdowns

began.

Earnings or vision breath was at a record low, as analysts became pessimistic at the bottom

of the recession.

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