Tags: earnings | bull stock market | economy | investors

Earnings Show Bull Market Can Continue

By    |   Wednesday, 29 July 2015 10:55 AM

Investors around the world seem to be increasingly nervous about China even though the decline in Chinese stocks is unlikely to hurt the average investor in America.

Like other parts of China’s economy, the stock market is highly regulated and at least partly controlled by the government.

This is one reason the market is not a large part of global indexes.

Since China is unlikely to lead to a meltdown in U.S. stocks, it’s important to look at what could spark a meltdown.

In the past, market sell-offs tend to be triggered by surprises from the Federal Reserve or earnings disappointments.

Right now, neither factor seems to be present.

The Fed is expected to raise interest rates this year. Fed Chair Janet Yellen is likely to follow an irregular schedule and increase rates every few meetings.

Traders see this coming and the rate hikes are being priced into futures contracts. With prices indicating we could see two hikes this year, a surprise from the Fed seems unlikely.

Earnings are coming in better than expected for the second quarter. Almost 75 percent of companies reporting earnings beat expectations this quarter, a higher than average number of earnings beats.

It’s bullish for stocks when company earnings come in higher than expected. It’s also bullish when prices set new highs as the S&P 500 did as recently as July 20. These factors are being ignored because big drops in China make a more interesting story.

Boring stories about earnings and new highs might not capture headlines but they could help investors who stay invested in stocks increase their wealth.

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MichaelCarr
Investors around the world seem to be increasingly nervous about China even though the decline in Chinese stocks is unlikely to hurt the average investor in America.
earnings, bull stock market, economy, investors
266
2015-55-29
Wednesday, 29 July 2015 10:55 AM
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