Earnings season is make-or-break for market bulls: Jonathan Levin
In the recent market surge, valuations soared, led by PE ratio expansion, amid hopes of economic strength and AI potential. However, with inflation concerns lingering and Fed rate-cut expectations deferred, earnings become crucial. While sentiment remains bullish, sustained optimism hinges on robust corporate performances. As asset markets buoy consumption, the economy's reliance on them poses risks. Amid diverse earnings outlooks, tech and consumer sectors may shine, but broader fundamental strength is imperative amid uncertain interest rate trajectories.
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By Jonathan Levin
Ben Graham, the value investor and Warren Buffett mentor, famously said the market is like a voting machine in the short run, but "in the long run it becomes a weighing machine." For the past six months, the strong US stock market has been firmly in voting machine mode, and companies were overdue for a weigh-in that has now begun.
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