Barclays strategists said in a note that fourth-quarter results have been unimpressive so far but mostly in line with lowered expectations, with about one-third of companies having released earnings.
Analysts noted that the US is ahead of Europe, while defensives are ahead of cyclicals, which have been a major drag on beats so far, especially in Europe.
Investors are positively reacting to earnings clearing events despite negative earnings revisions, while guidance is generally reassuring, the strategists added.
In addition, the Barclays strategists note that earnings beats are running below average in Europe and slightly above average in the US, where tech and industrials are delivering the bulk of beats. On the other hand, consumer discretionary and materials earnings are lagging.
Tech is also delivering the majority of the beats in Europe, while consumer discretionary and industrials are waning in the region.