Including special items, the company reported net income of $161 million or 58 cents per share in the quarter, down from $166 million or 62 cents per share a year ago.

Similar to the sell-off following Q1 earnings report, we believe investors have once again ignored the progress GT has made in improving operating efficiencies. Evidence of this progress can be seen in expanding operating margins.

The best scoring sector across our 1,800 stock universe remains utilities. Basic materials has also moved above average in the past week (see later in this report). Industrial goods and consumer goods score in line with the average universe score.

The best large cap sector is utilities, which offer robust seasonality ahead of summer. Basic materials have strengthened thanks to improving scores for oil & gas.

The real earnings season is nearly over. For the past month and a half, our analysts have diligently gone through over 3,000 annual reports, Form 10-K’s, to make adjustments from GAAP numbers to economic earnings. This report features an interesting non-operating item we’ve discovered in numerous filings.

In late August, we looked at a few short, medium and long term wave count alternatives for the HUI.