Election, Fiscal Cliff, Europe… But Earnings were also Weak.

So right after the election equity markets got a bit shaky; although, have now perked up a bit.  Fears that the President will raise taxes and sink the economy, the Fiscal Cliff is right around the corner, and more negative news out of Europe seemed to “drive” equity markets lower.

So what did move equity markets?  Anyone who professes to have an idea is guessing.  Take your pick of the above if you want to rationalize whatever it is you want to rationalize about changes in the stock market; however, you should consider this – QE3 earnings were bad and forward guidance was weak…

1.  Looking ahead, assuming markets discount the future, once again future guidance was poor.

2.  The earnings beat was up from the last few quarters, but nothing spectacular.

3.  The revenue beat rate was much worse, in fact we've now had consecutive two quarters where revenue beat was below 50% and that hasn't happened since Q4 '08 and Q1 '09.

Remember, earnings  are the ultimate drivers of stock markets, so when you hear various noise it’s important to keep that in mind.