Earnings Scoreboard - Top class or just top line?

“These things just don't work out as intended. Think back when the Carter administration put credit controls in place to reduce costs. The impact was so severe, they were very swiftly rescinded within two months... for context, US consumers spend $6 trillion on their credit cards year, and outstanding US credit card balances are over $1.2 trillion. They grow about $80 billion a year. There's over $4 trillion in untapped capacity at risk. If you make these products unprofitable, that spending will be drastically reduced, and that's British understatement.”

— Jane Fraser, Citi Chair and CEO, on the company’s Q4 earnings call, on 14th January, 2026.

Who’s scoring highest and why

During the week of 12th January, 14 S&P 500 companies (including 2 Dow Jones Industrial Average components, JPMorgan Chase and Goldman Sachs) reported earnings. Despite these companies beating estimates, the market reaction was driven by the ‘great rotation’ trade where small caps’ momentum has benefited from the January effect - the year’s most active allocation window of the year – and driven Russell 2000’s return of 7.89% year-to-date.

As of 16th January, 84.8% of the 33 S&P 500 companies that have reported so far beat earnings expectations, while 69.7% surpassed revenue forecasts, a strong beginning to this earnings season. According to FactSet, the blended Q4 earnings growth rate stands at 8.2% - compared to last week’s 8.2% and higher than the 8.3% projected at the end of the quarter on 31st December. It would mark the tenth consecutive quarter of positive earnings growth for the index. The S&P 500 last saw four straight quarters of double-digit earnings growth throughout 2021, from Q1 to Q4. Last week, while some Financials companies reported positive EPS surprises and Consumer Discretionary firms saw their EPS estimates revised upward, these gains were balanced out by lower EPS estimates for companies in the Energy and Health Care sectors.

The S&P 500 surprise factor is currently at 5.8%, lower than the average of 7.4% seen over the past four quarters and below the five-year average of 7.7%. Within sectors, Information Technology leads with a 20.6% positive earnings surprise, while Financials has beaten estimates by 0.5%. Since the end of Q4, Consumer Discretionary has experienced the most significant improvement in earnings growth among all 11 sectors, shifting from a projected decrease of 3.6% as of 31st December, to a decrease of 2.9% today.

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