A Doomsday Recession Mentality is Keeping the S&P 500 Strong

North American companies in the S&P 500 are reporting quarterly earnings significantly above expectations, the best in two years, as they cut costs in anticipation of a recession. Profits are averaging 8.4% higher than predicted, with about 79% of companies surpassing profit forecasts. This cautious approach includes managing expenses and accumulating cash, which has been effective amid stable macroeconomic conditions allowing for predictable revenue outcomes. Consequently, analysts are now more optimistic, adjusting their earnings forecasts upwards at the quickest pace in two years.