Posts tagged: earnings

Citi: equities no longer follow earnings

In the long run, earnings are the most important driver of stock prices. So, it would make sense that stock prices would fall if earnings expectations  fell and vice versa. But in recent years, that relationship hasn’t held.

“Markets stopped following fundamentals about two years ago,” said Matt King,  a credit products strategist with Citi. In a new presentation, King included a slide titled “Distorted Markets,”  which included the chart below.

cotd equities earnings

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