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Large caps dominate earnings season - In a recent note, J.P.Morgan summarises the surprises of earnings season. According to analysts, this season's surprise levels for the ASX200 are 'surprisingly' positive, after a negative skew for the last three reporting periods. The ASX200 has seen 21% of companies posting a positive surprise while 14% recorded negative surprises - a slightly positive skew on top of larger levels of total surprises. In terms of the proportion of significant surprises by market segment, the skew of positive surprises was favoured by the large caps, with the proportion of negative surprises increasing as market cap decreased. Just 7% of the ASX100 had a negative surprise, while 22% of the second 100 had a poor reaction to their result. Typically in recovery cycle, large cap out-performance leads the small caps and as the cycle accelerates small caps gain the momentum once inflationary forces kick-in. (VIEW LINK)


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