Stock Market continues to perform poorly
When recession came to an end, the Investors gathered courage and started investing in stock market. Some picked up large caps, some small and some chose mid-caps to make their investments in. there have been mane who have been picking a combination of all this to be on the safe side. However, the earning reports of stock companies have been released and it does not narrate a strong story on behalf on stock companies.
The prices and profits continue to fall
Most of the companies have shown a fall by 2 to 3 per cent in their profits in the third quarter of the financial year. The story of declining profits is getting rolled over from one quarter to the next. The worst hit is the technology sectors and energy sectors whereas telecommunication has still shown some improvement in compared to others.
Impact on Investors
This is the period of year when investors plan their investments for the next year or years. At this point of time a discouraging performance would be the last thing to attract the investors towards this market. The experts analyse the future and see no reason for the investors to put their money into the market.
However, Pierre Lapointe of Pavilion Global Market says, “We feel the consensus of earnings forecast is too optimistic.”
He also adds that he doesn’t see any better picture in terms of performance of the stock market in US in the fourth quarter even.
There are some who believe that the Stock Markets in US and Canada are still better performers in compared to the downturn of the global economy.
A study indicates that the earnings in the fourth quarter of the on-going year would be somewhere closer to 10% which is appreciated by Mr. Lapointe. He says that in a downturn it is amazing to see double digit earnings.
Even the P/E has shown some slight improvements in Canada, yet to gain the confidence of investors back, it has to go even much higher.
The Canadian market shows an even better performance than that so U.S. but it is probably not enough to keep the investors back in the market. This throws a challenge on the part of stock companies to improve them and put up a better show.