The run of Q3 results from the banks have broadly been positive in recent days. But before the banks started reporting results, we saw weak results from homebuilders Lennar (LEN Quick QuoteLEN - Free Report) and KB Homes (KBH Quick QuoteKBH - Free Report) . These seemingly positive results from the banks and weak numbers from the homebuilders show that the overall picture emerging from the Q3 earnings season, at least at this relatively early stage in the reporting cycle, is not uniformly favorable.

The weaker than expected results from KB Homes and Lennar reflect the continued challenging conditions in the housing space. The Fed has started easing monetary policy, but it will likely be a while before the interest rate environment becomes favorable for the housing space. Earnings for the Zacks Construction sector are expected to modestly decline in Q3, with earnings for the sector expected to be flat in 2024. Construction earnings peaked in 2022 and were down -8.7% in 2023. Growth is expected to resume in 2025, as further Fed rate cuts stimulate housing demand.

Beyond housing, the earnings focus lately has been banks and the Finance sector. Including all of the results that came out in the morning session of October 17^th, we have seen Q3 results from 64 S&P 500 members. Total earnings for these 64 index members are up +5.6% from the same period last year on +4.7% higher revenues, with 79.7% beating EPS estimates and 70.3% beating revenue estimates.

This is a better performance than we had seen from this group of 64 index members in other recent periods.

For more details about Q3 earnings season and the evolving expectations for the coming periods, please check out our weekly Earnings Trends report here >>>Earnings Results Provide Reassuring Economic View