Strong Earnings Help Market March Higher

By Scott Poore, AIF, AWMA, APMA
Chief Investment Officer, Eudaimonia Group

Markets resume march higher last week on positive corporate earnings.  Markets were still reeling from surprise inflation numbers the previous week until corporate earnings—namely, Nvidia—surprised to the upside.  The AI-related stock handily beat both earnings and revenue expectations for the 4th quarter.  While some doubters think valuations are out-of-whack, especially for the Mag 7 stocks, earnings growth actually supports higher stock prices.  In addition, we have not seen the type of volatility yet that is historically seen when bubbles are near a peak.

In fact, volatility today is much lower than just before the peaks in 2000 and 2007.  Meanwhile, the consumer continues to be upbeat on the economy, even lower income earners have shown improved confidence.  Jobless claims, while some headlines would suggest otherwise, were the lowest in 5 weeks.  It’s important to remember that headlines do not always represent the aggregate of the labor market.  The Fed’s comments on the PCE numbers this week could move markets in either direction.

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