Though second-quarter S&P 500 earnings were up overall, excluding the energy sector, earnings are expected to decline 3.7% relative to the same quarter last year.
Despite these relatively lackluster results, investors have reacted positively to earnings news, indicating that expectations were very negative heading into reporting season.
Today, markets are at a fork in the road, and whether or not it’s prudent to “buy the dip” may depend on where the economy goes next.
A reactive Federal Reserve within an economy that lacks spare capacity – in labor, energy and housing – can cause more disruptions, as well as bouts of irrational exuberance, within economic activity, earnings, and asset prices.
July 2022 Commentary: Domino Effect
Summary
Read and download the commentary here.
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