We close to wrapping up the Q3 earnings season in the US. Of the 500 S&P stocks, 362 companies have reported earnings to the end of Q3. 78% of them have come in better than expected having beaten the consensus forecasts. This is the best ratio since Q2 2010. 59% have beaten sales estimates. So far, this implies a growth rate of 7.2% which is marginally better than we expected (7%). By sector, the area which is struggling is consumer discretionary but which may get a boost from falling oil prices. For Q4, 46 companies downgraded their earnings forecasts, mostly commodity related companies, and 18 have upgraded. This puts the S&P500 12 month forward PE ratio on 15.5x earnings which is above the long term averages.