Earnings Report Card

About 85% of the companies reporting their third-quarter earnings met or exceeded analysts’ estimates. Earnings grew more than 11% from the same period last year. Next quarter, they are expected to grow by about 7%. This earnings growth pace is astounding. This is especially so since many of the leading growers are huge companies.

If you have been wondering why the stock market has been doing so well, here is the answer. Earnings growth is not the only reason stock prices increase, but it is the major one. While artificial intelligence integration for many companies is still early, greater efficiencies and good earnings growth should continue.

Although the Bull and his partners expect additional gains this year from our stock market, volatility is not going away. Recently, investor sentiment has cooled on AI and those companies that are supporting the buildout. Investors question if artificial intelligence will ever produce satisfactory returns on the huge investments being made. We shall see, however, that companies are plowing ahead. It will be interesting! Stay steady my friends.

-The Lonely Bull