This has been a terrible quarter for investors who care about the fundamentals. Great companies are reporting spectacular results . . . and the stocks aren’t even extremely overpriced, but they’re getting punished anyway.

How bad is it? Start with the whole concept of “consensus expectations.” The analysts do the math, weigh corporate management’s guidance and pick a number.

That number then forms the basis of what they tell their clients a stock is worth. The faster the growth, the higher the multiple can get.

Add up all the targets and you’ve got a pretty good sense of what the smartest people on Wall Street see going on inside each company, It will never be quite as accurate as the inside view from the top, but it’s usually pretty good.

And the stock generally trades as though the company will perform according to expectations. If something changes in the commercial landscape, expectations will shift and the stock will need to adjust in order to keep up.

But sometimes the entire economy shifts at once, making expectations a moot point. That’s what happened this quarter.

Earnings have been good. Usually targets are set low enough that 77% of companies in the S&P 500 do better than the analysts collectively suspected. This quarter, we’re looking at 79% of them beating the target.

It’s not a whole lot better than average. But it’s definitely not worse. This is not a bad quarter.

However, companies that did better than expected . . . 5% better, on average . . . are still dropping a little around their quarterly announcement. They aren’t being rewarded.

I think it’s largely because market conditions are so bad that quarterly results are getting ignored. Nobody wants to buy a winner on a day when nearly all stocks are selling off.

And investors have shown that they’ll concoct any theory to justify selling. They’ll obsess over the fine points of guidance, ignoring the headline numbers until they find a comparison that “proves” that the company is faltering.

When they hit that number, they sell. Guidance is a little less optimistic than usual, but management’s outlook usually goes down . . . about 67% of the time, forward targets guide expectations lower.

This quarter, that negative guidance number is coming in at 69% of the S&P 500. Not great, but it’s only the end of the world if that’s what you want to see.

Analysts usually have to lower their expectations a little in earnings season, even though it sets us up for a beat down the road. It’s all part of the game of guidance, consensus and the acutal numbers.

For the market to recover its reason, we need good numbers to get good response. That’s actually starting to happen as I write this . . . Affirm (AFRM) and Compass (COMP), two companies I track as part of my IPO Edge, soared after reporting their numbers.

Evidently there just wasn’t anything bad enough there to sell. Or the stocks had gotten oversold because Wall Street has letting its own dread take over before the numbers came out.

Either way, it’s a constructive sign. And shareholders are cheering.