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How First-quarter Earnings Influence Members’ Outlook

This week’s Sentiment Survey special question asked AAII members how first-quarter earnings have influenced their outlook for stock prices. Nearly two out of five respondents (39%) said the quarterly profit reports had no or only a minimal impact on their outlook. Many of these respondents said they are more focused on politics, though others said the earnings reports confirm their outlook or that they take a long-term view and are not influenced by one quarter’s results. Nearly 33% of respondents credited first-quarter earnings for making or keeping them optimistic about the prospects for stocks. Some of these respondents pointed to corporate profits as a sign of growth. Slightly more than 13% described the market as fairly valued or overvalued and don’t think earnings were good enough to reduce valuations.

Here is a sampling of the responses:

  • “I try not to let one quarter influence my purchases or sales.”
  • “Better than expected, so I’m cautiously bullish, although valuations are high for the S&P 500.”
  • “They’re just good enough to keep the market from selling off.”
  • “Earnings on average are still not high enough to support current prices.”
  • “Not at all. It’s all about politics now.”

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