Everybody down

March 3, 2009

Thomson Reuters proprietary research shows the estimated earnings growth rate for S&P 500 index companies in the first quarter of this year to be minus 31.4 percent. As the chart below shows, all 10 sectors that comprise the index are expecting an earnings decline relative to a year earlier.

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In the Globe and Mail, Brian Milner assails “the professional purveyors of doom and the opportunistic politicians who, to paraphrase an aide to U.S. President Barack Obama, consider a crisis of any kind a terrible thing to waste.” Milner warns us against “a psychological phenomenon known as the Recency Effect”:

“When you reach extremes, emotion causes people to justify a continuing trend and ignore history and long-term data,” says SMU finance professor Brian Bruce.

Via http://www.stockresearchportal.com/stock news.asp

How much of an effect do you think this is having on downward pressure?

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