The latest interim profit-reporting season has been unusual. The market, normally fixated on earnings results, seems more interested in overseas news. That’s no surprise after savage falls in global equities earlier this month, as bear-market fears intensified.
Nevertheless, company valuations – and bull and bear markets – are ultimately determined by earnings. On this score, the latest interim reporting period has been solid rather than spectacular, but there is enough to suggest the bull market will resume.
Reasonable earnings results that are not getting downplayed in a market that, for now, is focused on macro trends, will buoy value investors. That’s a good time to look for quality companies that are outperforming market expectation, and still offer value.