Editor's note: This is an unlocked excerpt from Hedgeye Macro Analyst Christian Drake. You can follow him on Twitter @HedgeyeUSA
BETA or BEAT-MISS? Relative to 3Q13 where Macro completely monopolized price action, "The Print" has had a moderately impactful influence on subsequent price performance thus far in 4Q. Below we chart company Beats & Misses vs subsequent market adjusted 3-day performance.
- EPS: Earnings performance has shown a stronger relationship with performance as 62% of companies beating EPS estimates subsequently outperformed the market by 4.1% on average while 38% went on to underperform the market by an average of -3.0%. EPS misses have been sold heavily with 78% of companies missing EPS estimates subsequently underperformed the market by -5.4% on average.