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Chart of the Week: Earnings and Subsequent Market Gains

Posted By Barry Ritholtz On February 9, 2004 @ 12:15 pm In Finance | Comments Disabled

Dividing the S&P500 earnings gains into quintiles and the subsequent market performance:

S&P earnings “Sweet Spot”
corp_earnings.bmp
Source: CBS MarketWatch [1]

“When quarterly earnings were more than 10 percent lower than comparable results a year earlier, but not more than 25 percent lower, the S&P 500 grew at an annualized average of 28.6 percent,” observes Mark Hulbert [1]. Note the fastest year over year earnings growth did not produce the best market returns.

Random Items:
The Not-so-invisible Hand of Alan Greenspan [2]
Revenge of the Transports [3]
Let the dollar drop [4]
Buildup of Cash Isn’t Swaying Hiring [5]
‘Out of Gas’: They’re Not Making More [6]
Soldiers Record Lessons From Iraq [7]

Quote of the Day
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they recover their senses slowly, and one by one.” -Charles MacKay [8]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/02/chart-of-the-week-earnings-and-subsequent-market-gains/

URLs in this post:

[1] CBS MarketWatch: http://cbs.marketwatch.com/news/story.asp?guid=%7B98D03C14-3976-4729-937E-2E06424722B0%7D&siteid=mktw

[2] The Not-so-invisible Hand of Alan Greenspan: http://quote.bloomberg.com/apps/news?pid=email&refer=columnist_lewis&sid=a6KLKK_DILEs

[3] Revenge of the Transports: http://cbs.marketwatch.com/news/story.asp?guid=%7B19E21869%2D0BDE%2D4631%2D892D%2D48FB94827CAD%7D&siteid=mktw

[4] Let the dollar drop: http://www.economist.com/opinion/displayStory.cfm?story_id=2404984

[5] Buildup of Cash Isn’t Swaying Hiring: http://www.latimes.com/business/la-fi-petruno8feb08,1,7183700.column?coll=la-headlines-business

[6] ‘Out of Gas’: They’re Not Making More: http://nytimes.com/2004/02/08/books/review/08RAEBURT.html

[7] Soldiers Record Lessons From Iraq: http://www.washingtonpost.com/wp-dyn/articles/A22307-2004Feb7.html

[8] Charles MacKay: http://www.amazon.com/exec/obidos/ASIN/051788433X/ref=ase_thebigpictu09-20/102-4529470-0078540

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