Earnings Have Been So-So. Can the Mag Seven Turn Things Around? [Video]

Corporate earnings are lagging a key historical average so far this season. That could change this week, with about a quarter of the S&P 500—including five of the hugely profitable Magnificent Seven companies—set to report results. 

As of Friday evening, 75% of the S&P 500 companies that had reported third-quarter profit results had beaten Wall Street’s expectations, slightly less than the five-year average, according to data from FactSet Research. In the aggregate, earnings have exceeded expectations by almost 6%, more than two percentage points below average. 

FactSet’s senior earnings analyst, John Butters, estimates that the S&P 500 as a whole grew earnings by 3.6% last quarter. That would represent the benchmark index’s fifth consecutive quarter of growth, though it would also mark its slowest growth rate of any of those quarters. 

Those results may have been underwhelming, but Bank of America analysts note that earnings calls tell a slightly different story. Mentions of weak demand have fallen to a two-year low, and mentions of “bottom”—a …