For The First Time Since The Tech Bubble The Market No Longer Rewards “Beating” Companies

Jon Market Commentary

With Q2 earnings season rapidly approaching its end, Bank of America points out a curious observation: stocks that beat earnings expectations are not getting “rewarded” with higher prices. This is the first time this has been observed in 17 years – the last time the market seemed oblivious to corporate upside was in 2Q 2000… just before the Tech Bubble burst. As BofA warns, “this could be a warning sign that equity market expectations and positioning more than reflect the good results.”
Adding to peak valuation concerns, BofA’s quant strategist Savita Subramanian also expects full-year EPS growth to decelerate from 8% in 2017 to 5% in 2018, and redundantly adds that “the stock market may not react well to decelerating earnings.” That’s one way of putting it.
Some more details on this notable “market peak” phenomenon:

This post was published at Zero Hedge on Aug 8, 2017.