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Premium: Direction of equities on a knife-edge – quarterlies will tip the balance
Bacher reckons after the sell-off, the risk of being out the market is now higher than being in it. Because over time, equities rise in value.
We're about to enter the US's quarterly earnings reporting season. Not for decades has Wall Street's three monthly ritual been quite so important. The US stock market has just experienced its worst first half of any year since 1970. What happens next depends on what emerges from the companies themselves over the next few weeks.
Markets usually bounce back strongly after a sell-off like we've seen in 2022. But that's not a cheque anyone's writing just yet. For one thing, the meltdown came off a high base. For another, at their current level, stocks only offer value if earnings remain elevated. Were profits to disappoint, another sharp decline is likely.
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