Second-Quarter Earnings Have Mixed Effect on Investors’ Outlook

This week’s Sentiment Survey special question asked AAII members how second-quarter earnings have influenced their outlook for stock prices. Just under 38% of respondents said that the earnings reports have had a positive impact, or at least led them to be less negative. Approximately one-third of respondents (32%) described their outlook as not being altered by corporate profits. Some of these respondents said Washington politics are having a bigger impact than earnings. Slightly more than 22% of respondents have a more negative view of stocks following second-quarter earnings season. A perception of valuations being too high and/or the pace of earnings growth being unsustainable were the primary reasons why.

Here is a sampling of the responses:

  • “Good earnings reports are a positive sign.”
  • “They prompted me to revise the decline I expect to a smaller magnitude.”
  • “Stock prices are higher than they should be based on earnings.”
  • “Second-quarter earnings have been better than I expected, but I’m concerned that the third quarter may not be as good.”
  • “Earnings are not influencing my outlook as much as Washington D.C. turmoil and uncertainty.”

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership.