Is the earnings rally starting to lose steam? Big surprises are moving stocks less
posted on July 21, 2009 at 5:36 pm
As earnings rallies drive along–and we’re sure in one now–investors gradually start to expect good news. More and more earnings surprises are anticipated by stock prices that start to climb before the results are reported. Part way through the earnings season a big surprise doesnt move a stock much any more since the news has been baked into stock prices in advance. And finally, the rally reaches the stage where prices actually fall on great news since even the great has been anticipated by rising prices and investors now sell the news.
I don’t think we’ve reached that last stage yet. But I can see the middle stage starting to unfold. Read more
