US Q1 earnings will end this equity market correction

Chief Investment Officer and founder of Aitken Investment Management
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US equities have led the recent correction in global equities. We have been swinging around on Twitter headlines, with index futures traders deciding the short-term direction of markets. Pretty much everything has been moving up and down in tandem, led by gyrations in index futures markets.

We have been devoid of fundamental company news, due to the blackout period on Wall St, and simultaneously we have been without on-market buyback support, due to the same company blackout period. That changes at the end of this week as we get the first taste of US Q1 earnings, which will be strong, and buybacks will also be allowed to recommence.

Back to fundamentals

I believe the market focus will switch from macro risk events, to bottom-up stock fundamentals, and with the S&P500 now back at a reasonable valuation, there is a good chance strong US company earnings, plus buybacks recommencing, will put a floor under Wall St. If I am right, and we head back to a fundamental earnings focus, then I am of the view that this correction is over. I need US earnings to beat expectations, and I feel they will.

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