Takeaway: Given the nasty reality of underperforming corporate earnings, Wall Street's earnings estimates look downright ridiculous.

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1 Chart: Why Wall Street's Earnings Estimates Defy Common Sense & Rationality - earnings 8 12

The red box above shows Q2 earnings for the 456 of 500 S&P 500 companies that have reported thus far. Note that five of ten S&P 500 sectors have logged negative year-over-year earnings growth, with aggregate earnings declining -4.1%. 

Meanwhile, the yellow box above, shows Wall Street earnings estimates for the coming four quarters into Q2 2017. Note the lofty expectations, particularly in 2017, when forecasts get downright ridiculous.