Earnings season for the last quarter in 2016 has been underway for several weeks now since Alcoa reported on January 24. With 62% of the S&P 500 companies finished reporting Q4-2016 results, their year-over-year revenue and earnings growth comparisons are the highest since Q3-2014. 70% of those reporting have exceeded industry analysts’ earnings estimates, averaging a 7.9% earnings gain. These types of numbers are some of the best since the financial crisis began, but you wouldn’t really know it from the behavior of equity prices. This type of earnings growth closes the door for good on the energy-driven earnings recession that started in late 2014. However, data from Bank of America Corp show that companies whose top-and bottom-line results beat analyst predictions gained less than 1 percent the next day, less than half the average since 2000. And trading activity has dropped, with average monthly stock volume near the bottom over the last two years. Thin trading usually leads to increases in volatility, but that isn’t the case right now. The S&P 500 has gone 83 days without a down move of 1%, the longest such streak in more than a decade. So what is going on? Several things explain the relative earnings indifference. First, the equity rally following the election and leading into earnings season was large, 6% for the S&P 500 in the three months before earnings reports began, which is more than three times the average over the last decade. It is natural for the market to take a breather. Second, earnings…