Only 38% of S&P 500 companies that have reported have beaten revenue expectations – compared to a historical average of around 46%. As Bloomberg notes, Q3 2013 will be the first time for 3 consecutive quarters of sub-50% meeting expectations since their records began. Earnings are not much better having seen a slide in performance relative to expectations for 4 quarters now. It seems thehockey-stick of H2 2013 earnings hope that we so vociferously pointed out as ridiculous early in the year is indeed far too high and combined with valuations (as we noted here) that are stretched (Price-to-Sales at 1.6x is around twice the norma since the 1990s) it suggests that any hint of a taper will remove the only leg left for stocks – that of hope-based multiple expansion.