{"id":444657,"date":"2010-03-18T15:38:00","date_gmt":"2010-03-18T19:38:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:409692"},"modified":"2010-03-18T15:38:00","modified_gmt":"2010-03-18T19:38:00","slug":"markets-great-expectations-overlook-the-real-recovery","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/444657","title":{"rendered":"Markets’ great expectations overlook the real recovery"},"content":{"rendered":"

Judging from how the market is reacting to earnings announcements, it seems that there is a growing gap between the results that the stock market expects and the results that companies are delivering. As a result, companies that deliver strong results may actually fall on the good news. <\/p>\n

One example is Winnebago Industries Inc., which on Thursday reported a small profit in the second quarter after six straight quarters of losses. Revenue tripled from a year earlier. So what did shares in the RV maker do? They tumbled 6%.<\/p>\n

The case of FedEx Corp.<\/a> wasn\u2019t quite so dramatic, but it too beat analysts\u2019 expectations only to see the market shrug its shoulders. The package shipper said its third-quarter profit more than doubled and its revenue rose more than 7%, but despite beating forecasts on both counts, its shares budged barely 2%.<\/p>\n

As Matt Phillips of the Wall Street Journa<\/i>l notes, the market is clearly pricing in some rosy scenarios when companies that exceed expectations no longer see their share prices jump as a result.<\/p>\n

Investors seem to be counting on a V-shaped recovery. Instead, several sectors have bounced off their lows, but are still fighting to get back to what used to be considered normal activity. Look at hotel room occupancy in the United States<\/a>. It\u2019s running at just under 58%, a solid increase from a year ago, but still well below the 62% that was common in the good old days.<\/p>\n

Winnebago\u2019s return to profitability and FedEx\u2019s swelling bottom line demonstrate that a recovery of some size is taking place. The problem, for investors, is that share prices already seem to have built in a sizzling recovery and then some. <\/p>\n

Freelance business journalist Ian McGugan blogs for the Financial Post. <\/i><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Judging from how the market is reacting to earnings announcements, it seems that there is a growing gap between the results that the stock market expects and the results that companies are delivering. As a result, companies that deliver strong results may actually fall on the good news. One example is Winnebago Industries Inc., which […]<\/p>\n","protected":false},"author":4062,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-444657","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/444657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4062"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=444657"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/444657\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=444657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=444657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=444657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}