{"id":527026,"date":"2010-04-14T05:25:00","date_gmt":"2010-04-14T09:25:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/goldman-all-the-good-earnings-are-fully-priced-in-and-investors-will-sell-the-news-2010-4"},"modified":"2010-04-14T05:25:00","modified_gmt":"2010-04-14T09:25:00","slug":"goldman-all-the-good-earnings-are-fully-priced-in-and-investors-will-sell-the-news","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/527026","title":{"rendered":"Goldman: All The Good Earnings Are Fully Priced In, And Investors Will Sell The News"},"content":{"rendered":"<p><em>(This guest post previously appeared at the <a href=\"http:\/\/pragcap.com\/goldman-sachs-good-q1-earnings-priced-in\">author&#8217;s blog<\/a>)<\/em><\/p>\n<p>Goldman Sachs says the recent surge in equity prices is fully discounting the positive earnings season that began two days ago.&nbsp; As can be seen in the accompanying chart, Goldman says investors have begun to catch onto the &ldquo;better than expected&rdquo; trend in earnings and have been front running the last few earnings seasons.&nbsp; Each earnings season has subsequently resulted in weaker equity performance as investors look to &ldquo;sell the news&rdquo;.&nbsp; When the market bottomed in March 2009 investor sentiment with regards to earnings was extremely negative (<a href=\"http:\/\/pragcap.com\/light-at-the-end-of-the-tunnel\" >something our Expectation Ratio was way ahead of the curve on &ndash; see here<\/a>).&nbsp;<\/p>\n<p>The two quarters following this extreme negativity resulted in significant upside surprises.&nbsp; By Q3 &lsquo;09 the trend was well in place and it was clear that corporate profit margins were expanding and resulting in stronger than expected earnings.&nbsp; Each of the past two earnings season were front-run by investors who had noticed this trend and were hoping for performance that was similar to the prior earnings seasons.&nbsp; Neither Q3 nor Q4 resulted in significant gains and the Q4 earnings season coincided with the largest sell-off of 2010.&nbsp; The current rally into earnings is the largest since the quarter after the March 2009 bottom:<\/p>\n<p><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bc5897a7f8b9a830e340100\/chart.png\" border=\"0\" alt=\"chart\" \/><\/p>\n<p>Source: Goldman Sachs<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"http:\/\/pragcap.com\/goldman-sachs-good-q1-earnings-priced-in\">Read more market commentary at The Pragmatic Capitalist &gt;<\/a><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/goldman-all-the-good-earnings-are-fully-priced-in-and-investors-will-sell-the-news-2010-4#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/_imeOHqP5t4\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This guest post previously appeared at the author&#8217;s blog) Goldman Sachs says the recent surge in equity prices is fully discounting the positive earnings season that began two days ago.&nbsp; As can be seen in the accompanying chart, Goldman says investors have begun to catch onto the &ldquo;better than expected&rdquo; trend in earnings and have [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-527026","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/527026","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=527026"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/527026\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=527026"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=527026"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=527026"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}