Can earnings season stop the market’s decline?

Oct 15 12:10 2018 Print This Article

Markets are crashing! Sell your stocks! The world is coming to an end! There’s a good chance you’ve heard at least something like this over the last week, whether from cable TV, a business news website or your panicked friend who wants to pull everything out of the market.

Stocks have taken a tumble – the S&P 500 has fallen by about 5%, while the S&P/TSX Composite Index is down about 4% – but the timing for the decline couldn’t have been better.

Why? Because it’s earnings seasons.

Related links: U.S. earnings beaters are gold for your portfolio

It’s always difficult to know why markets fall when they do, but, at least this time, market prognosticators are concerned about rising U.S. interest rates and slower Chinese growth.

The 10-Year U.S. Treasury yield did top 3.2% this week, and that has people worried about business and consumer spending growth. If it becomes too expensive to borrow then companies will invest less, and Americans, who drive global markets, will buy fewer goods.

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Money Sense

MoneySense is a Canadian personal finance and lifestyle magazine published by Rogers Publishing Limited, a division of Rogers Communications.Written for Canadians who want to take financial control of their lives, MoneySense is Canada's best-selling investment and lifestyle magazine, helping readers make smart, informed decisions about how to get the most from their money. The magazine has received many awards, including multiple National Magazine Awards and CFA Society Toronto Awards.

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