One reason why the current earnings season has not done much to push prices higher is from an historical standpoint, stock returns tend to peter out when earnings soar.
Contrary to conventional wisdom, Ned Davis Research shows that when year-over-year changes in the S&P 500 earnings are +20% or higher, the market gains just +1.5% per year.
However, when 12-month earnings growth has been between
-10% and -25%, stocks have soared at more than +26% per year.
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