Rolling earnings forecast is next test for markets

The shares finally broke a three-week losing streak. Their continued recovery may depend in part on how the earnings season plays out next month.

Analysts have cut their estimates for third-quarter earnings growth by 5.5 percentage points since June 30, according to John Butters, senior earnings analyst at set of facts. That’s more than usual and the biggest reduction since the second quarter of 2020, when the Covid-19 pandemic and subsequent lockdowns crippled economic activity.