Market resilience despite poor earnings season is telling reports this earnings season has been the poorest in recent times.

According to the article which references Credit Suisse US Equity Strategist Jonathan Golub, this is the worst earnings season in 24 years. Consensus EPS has also declined by 2.9% for 2023.

The market has been resilient despite the poor showing. This is telling. Dow Theory maintains that a bull market has three phases. The first phase, accumulation, sees smart money recognising the current poor conditions, but positioning for the turn up. Bids increase as selling volumes diminish. There is a feeling of pessimism. However, prices have stopped going down. This matches with current resiliency.

Markets are forward looking, and these participants are positioning for the second phase, which sees improved corporate earnings. The Fed will need to reach the apex of its current hiking cycle sooner rather than later and today's CPI print will be an important piece of the puzzle.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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