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Until recently, bulk of bull run driven less by earnings

At the mark of the longest bull run in the history of the U.S. stock market, a brief look at the earnings behind the runup show that the fundamentals have been less compelling. In the years leading into the crisis, monthly year-over-year earnings growth averaged more than 15%, and while falling to near -22% during the peak crisis periods, settled near 10% during the current bull run. Throughout the run-up were periods of negative earnings growth, notably 2015 and 2016, while the S&P 500 index rose about 175 points, or 8.5%. The past 20 months have seen significant improvements in earnings despite market volatility that has at times suppressed the index. The year-over-year earnings growth at the end of July was 18.6%, its highest mark since August 2011.

Additionally, data show that most of the heavy lifting is being done by fewer companies. The standard deviation of 12-month earnings per share has steadily increased since 2012, suggesting that while the overall EPS of the index is increasing, there is less consistency between the underlying components.

Note: Extreme outliers (see: AIG -$480) were removed from earnings distribution data.