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Expand chart
Adapted from a FactSet chart; Note: Values shown represent average stock price change in the two days before issuing negative earnings-per-share guidance + average stock price change in the two days after; Chart: Axios Visuals

More companies than usual are signaling that first quarter earnings will come in below analysts' expectations. But investors are selling those companies' stock less than they typically do.

By the numbers: 73% of S&P companies that have given guidance for the first quarter gave negative guidance — that's slightly higher than the 5-year average of 70%.

  • These companies have seen their shares increase 0.8% on average. Typically, these companies see an average of a 0.5% drop in their stocks. If it holds, it'll be the highest average positive price reaction to bad earnings news since 2015, per FactSet.

What's happening: Companies are struggling to pass on labor, transportation and material costs. That's leading to expected profit earnings pullbacks.

What to watch: Investors "do not appear to be pricing in an earnings recession," BlackRock Investment Institute's Jean Boivin wrote in a recent note, despite projections of negative earnings growth for the first quarter of 2019 and significant markdowns for the second quarter.

Go deeper: The earnings-beat game for corporations

Go deeper

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Illustration: Sarah Grillo/Axios

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  2. Vaccine: Moderna to file for FDA emergency use authorizationVaccinating rural America won't be easy — Being last in the vaccine queue is young people's next big COVID test.
  3. Politics: Bipartisan group of senators seeks stimulus dealChuck Grassley returns to Senate after recovering from COVID-19.
  4. States: Cuomo orders emergency hospital protocols as COVID capacity dwindles.
  5. Economy: Wall Street wonders how bad economy has to get for Congress to act.
  6. 🎧 Podcast: The state of play of the top vaccines.
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Why it matters: The existing PET brain scan test costs some people about $5,000 and often isn't covered by insurance, AP reports.

Updated 2 hours ago - Politics & Policy

Wisconsin, Arizona certify Biden's victories

Photo: Demetrius Freeman/The Washington Post via Getty Images

Arizona and Wisconsin officials confirmed the presidential election results in their states, formalizing President-elect Joe Biden's victories in the key battlegrounds.

Why it matters: The moves deal yet another blow to President Trump's efforts to block or delay certification in key swing states that he lost.