Earnings season has just started. I'm not expecting that it will add to stock investors' angst caused by Washington's latest fiscal fiasco. For quite some time, earnings seasons have been marked by a very predictable and weird ritual as better-than-expected earnings for the latest quarter cause industry analysts to lower their expectations for the next quarter by about as much. That certainly happened during both the Q1 and Q2 earnings seasons.
Since the start of the previous earnings season, Q2 earnings turned out to be 70 cents per share better than expected, while Q3 estimates were lowered by 89 cents. This ritual is likely to continue, with actual Q3 results exceeding expectations, while Q4 estimates are lowered. None of this matters very much unless the latest results cause industry analysts to significantly change their estimates for 2014 and 2015, which is very unlikely.