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Q3 Earnings Have Modest to No Impact on Investors’ Outlook

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Last week’s Sentiment Survey special question asked AAII members how third-quarter earnings have impacted their market outlook. Responses were very mixed. The largest group of respondents (28%) said that third-quarter earnings did not have any impact or had little impact on their market outlook. Many of these respondents said the election’s outcome was more influential. About 18% described themselves as being more optimistic due to earnings, particularly over the short term. Conversely, 11% said that earnings remain too low to support current valuations. Others said that they are anticipating more/continued market volatility or want to see how the market reacts to the new administration over the coming months.

Here is a sampling of the responses:

  • “Earnings, not very much. Politics, on the other hand, are having a MAJOR effect.”
  • “Earnings were satisfactory, but the market P/E is still high, suggesting trouble ahead.”
  • “Quarterly earnings data is mostly just noise—to be ignored.”
  • “Earnings have improved my outlook for stocks.”
  • “Generally modest earnings translate into modest growth in the market.”

Want to weigh in? Take the survey yourself and see results online at http://www.aaii.com/sentimentsurvey.

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