With third-quarter earnings season effectively behind us (456 of the S&P 500 have reported), the results have been generally better than expected. This largely confirms what we are seeing in the real economic data, i.e., we’re still in the twilight zone, where the leading economic indicators of growth continue to deteriorate while the coincident and the lagging indicators are still showing surprising momentum (chart 1). Meanwhile, through the last quarter companies also still seem to have had plenty of pricing power to support margins.

In this Economics Weekly, we discuss the latest corporate earnings picture from the bottom up and the top down.

For a copy of this report or to subscribe to the Economics Weekly or Economic Indicators reports, please contact your William Blair representative.

Richard de Chazal, CFA, is a London-based macroeconomist covering the U.S. economy and financial markets.