In the US, it's been alleged that the recent market turbulence has exhibited on the fundamental state of her economy.
However, if we look at the recently concluded earnings performance of listed corporations...
they don't seem to paint the supposed picture.
According to Bespoke Invest, (bold emphasis mine)
``The earnings picture continues to look impressive. Heading into the close yesterday, the earnings beat rate (% of companies beating EPS estimates) stood at 71%, which is high in its own right. Last night and this morning, another 64 companies reported earnings, taking the total number of US companies that have reported since earnings season began up to 223. As shown below, the earnings beat rate now stands at 73.5%, which would mark the highest reading for any quarter since at least 1999 if the reporting period ended today. And even though the S&P 500 finished the day down, the companies that reported earnings last night and this morning collectively had a stellar day. The S&P 500 closed the day down 0.42%, but the stocks that reported earnings averaged a gain of 2.40%! The average 1-day % change for all companies reporting earnings this season stood at -0.24% coming into today, but the 64 additional companies added to the total today have bumped the overall number up to 0.52%."
Also if we look at the Index of Leading Economic Indicators, we see the same signs...
According to Northern Trust's Asha Bangalore, ``The Conference Board's Index of Leading Economic Indicators (LEI) rose 1.1% in December, marking the ninth consecutive monthly increase. The year-to-year change of the quarterly index advanced one quarter has a strong positive correlation with the year-to-year change of real GDP. The robust performance of the index points to continued economic growth." (emphasis added)
In short, actions in the markets again don't reflect on conventional fundamentalism.
While the (bull-bear) arguments may focus on ex-post events as against ex-ante scenarios, still there seems little clues that any of the recent activities could be attributable to "economic" metrics, unless one argues that a surprise or a sudden largely unseen "collapse" is in the offing.
That would be, of course, based on a preconceived bias and not based on current evidence.
While the (bull-bear) arguments may focus on ex-post events as against ex-ante scenarios, still there seems little clues that any of the recent activities could be attributable to "economic" metrics, unless one argues that a surprise or a sudden largely unseen "collapse" is in the offing.
That would be, of course, based on a preconceived bias and not based on current evidence.
Instead, this would seem to corroborate our thesis that politics have been the main force responsible for today's market jitters.
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