U.S.: Profits: An Even More Important Tea Leaf To Read

With stock prices driving demand, earnings take on a bigger role

More than anything else, the surge in the profitability of American corporations has been the root of the U.S. stock market's incredible run in recent years. Whether that runup in stock prices has been overdone is a question that investors and policymakers at the Federal Reserve continue to grapple with. But the fact remains that the outlook for earnings will always be the central factor in determining stock prices. And stock values have become an increasingly integral part of evaluating the economic outlook.

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