Forget interest rates, earnings are driving stocks right now
As interest rate cuts appear to be coming later rather than sooner by the Federal Reserve, F.L.Putnam Investment Management Co. Chief Market Strategist Ellen Hazen spotlights earnings as the core driver for stocks right now. Earnings “continue to accelerate” to the market’s benefit, Hazen tells Yahoo Finance, while lower rates won’t be the “biggest driver of stocks” at this time.
With profits still looking “pretty good” amid cooling economic data, Hazen sees earnings carrying greater influence. She notes stock reactions depend partly on “the starting valuation,” explaining phenomena where higher valued stocks get hit on negative earnings results, while smaller companies rise despite missing estimates.
Overall, Hazen emphasizes earnings momentum, not Fed policy, now matters more. Rate cut hopes may have buoyed markets before, but she believes solid back-to-back profit periods should turn investor focus.
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Editor’s note: This article was written by Angel Smith