S&P 500 is up 22 % YTD. Earnings trends, 2013 bottoms-up earnings have been revised down by 283 basis points YTD.
“Q3 earnings reporting so far: (1) 3Q earnings positively surprise, driven by Financials and higher than expected margins; (2) Revenues have been in line with expectations and trailing four-quarter margins remain stable despite positive surprises in 3Q; (3) Negative revisions to 4Q EPS Estimates. Company guidance has been more negative than usual with 42 of 51 companies (82%) guiding down 4Q expectations. In a typical quarter, 70% of guidance is negative. Bottom up consensus estimates for next quarter fell 1% in recent weeks.” (Goldman Sachs)