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Two Out of Five Investors’ Outlook Uninfluenced by Fourth-Quarter Earnings

This week’s Sentiment Survey special question asked AAII members what influence fourth-quarter earnings had on their outlook for stock prices. The majority of respondents fell into one of two groups. Slightly more than two out of five respondents (43%) said fourth-quarter earnings had limited or no influence. Many of these respondents pointed to other factors such as politics, the new tax law and trade policy. Others said they simply do not focus on quarterly earnings. Approximately 39% of respondents view fourth-quarter earnings as being positive for the stocks. Several of these respondents believe profits will help to support stock prices, while others view earnings as helping to offset other negative factors. Just 16% expressed a negative view of the market, primarily citing either the political backdrop or prevailing valuations.

Here is a sampling of the responses:

  • “Not much. The market is too focused on Washington and its circus.”
  • “They were certainly encouraging. The real risk, in my view, is not the economy, but global and political.”
  • “Reaffirmed my outlook for continued positive upward momentum.”
  • “Earnings were good, but not good enough to support current stock prices.”
  • “Some. I’m more concerned about interest rates and the overdue correction.”

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