We are in the middle of earnings season, and if you've been watching the charts this week, you’ve probably noticed a harsh reality: **Positive Earnings ≠ Positive Price Action.**
**Just look at the casualties from this week:**
* **3M ($MMM):** Beat profit estimates but fell **7%** on a glum forecast.
* **State Street ($STT):** Dropped **6.1%** as a dim outlook overshadowed the quarterly beat.
* **Netflix ($NFLX):** Slid **\~6%** on disappointing forward guidance.
I was looking at data (sourced from Bloomberg) that confirms what we are seeing anecdotally:
https://preview.redd.it/7hwlf3vxdseg1.png?width=1626&format=png&auto=webp&s=28a5c381dc236924976cfcba224acf0886802737
[](https://preview.redd.it/data-shows-worst-reaction-to-earnings-beats-since-17-why-is-v0-sgx3bw9adseg1.png?width=1624&format=png&auto=webp&s=e502282441f07546da6f70ea9d2339fbafd9b308)
Stocks that are actually *topping* estimates are still trailing the S&P 500 by an average of **1.1%**. That is the worst relative performance for "earnings beaters" on record going back to 2017. (Note: Still early days as only 9% of the companies of SPX market cap reported!)
**Why do you think this happening? And what is your play this earnings?**