OUTRAGEOUS: The stock market is rewarding companies that have bad news

If you were only looking at the stock market, which remains near record-high levels, then you'd have no idea that many companies are warning up front that the first three months of the year were worse than expected.

"For Q1 2015, 85 companies in the S&P 500 have issued negative EPS guidance and 16 companies have issued positive EPS guidance," FactSet's John Butters said. "If 16 is the final number of companies issuing positive EPS guidance for the quarter, it will mark the lowest number since Q1 2006."

Here's a little more color:

Due to the low number of companies issuing positive EPS guidance, the percentage of companies issuing negative EPS guidance for Q1 2015 is 84% (85 out of 101). This percentage is well above the trailing 5- year average (69%) and the trailing 1-year average (76%) for a quarter. If 84% is the final percentage for the quarter, it will mark the second highest percentage of companies issuing negative EPS guidance (and the second lowest percentage of companies issuing positive EPS guidance) for a quarter since FactSet began tracking the data in 2006. The current record is 85%, which was set in Q4 2013.

In recent years, it hasn't been unusual to see more companies announce negative guidance than positive guidance.

In recent months, the negativity has been tied to the oil prices crash and the stronger dollar.

It's hard to draw too many conclusions from this except that managements were just as surprised as everyone else by the unfavorable developments of late.

Meanwhile, for some reason, the stock market has been climbing with this trend. Look at the dotted blue line.

Investors have been surprisingly supportive of stock prices despite the bad news. Here's Butters:

To date, the market is not punishing companies that have issued negative EPS guidance for Q1, while it is rewarding companies that have issued positive EPS guidance for Q1 at only average levels.

The 85 companies that have issued negative EPS guidance for Q1 2015 have seen an average increase in price of 1.7% from two days before the guidance was issued through two days after the guidance was issued. This percentage is well above the 5-year average price decrease of 0.9% during this same window for companies issuing negative EPS guidance.

In fact, this quarter marks the largest average price increase for companies issuing negative EPS guidance for a quarter since Q2 2009 (+4.3%). Overall, 50 of the 85 companies that have issued negative EPS guidance recorded an increase in price during this time frame. Of these 50 companies, 6 recorded a double-digit price increase.

In other words, if you knew a company was about to cut its outlook and you shorted the stock, you would've been punished for being right.

That's outrageous. That's the stock market.

The first quarter ended Tuesday, and in just a few weeks companies will begin announcing their quarterly financial results.