| | | Italics below from today's WSJ MoneyBeat. Few investors understand the virtues of "buying low, selling high" than the savants of Wall Street. Market too high? Answer is simple: Create smoke screen "FAKE" news (China-tariffs, AMZN-Trump feud, TSLA problems) to alarm non-savants (you and me) and compel them to take profits/minimize losses. Mission accomplished. Now, get back in before earnings season begins and once again ignites markets - after we've re-invested, obviously at lower prices. Game on . . . buy low, sell high!
Stock investors have at least one reason for optimism: earnings season.
S&P 500 firms are forecast to have grown profits 17% in the first three months of 2018 from a year earlier. That would mark another strong period of earnings in what's become a lengthy string of robust quarters.
What's more, those earnings estimates reflect an upward revision of 5.4% throughout last quarter, a record high change. Quarterly expectations are typically revised down by an average of 5.5% over the past decade, according to FactSet. Earnings season kicks off next week when banks start reporting.
That's one sign the fundamental underpinnings of the stock bull market remain intact, despite recent market volatility that has stoked fears of a more prolonged downturn. Investors have recently fretted about a wide range of uncertainties, from the threat of a trade war to heightened scrutiny of technology giants.
"We view earnings growth as the single most important factor for equities and think that continued momentum should help move the market higher," said Morgan Stanley equity strategists, led by Michael Wilson, in a note to clients.
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