Companies
Stock-Market Vigilantes Dial Back Penalties for Earnings Misses
- Investors’ negative reactions to poor results are diminishing
- This shows the market has priced in a lot of bad company news
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Stock-market investors are looking to earnings next week from Apple Inc., Amazon.com Inc. and Meta Platforms Inc. for signs of whether Wall Street’s projections are too optimistic as the US economy cools.
But as signs of a slowdown mount, there’s a silver lining: Battered by last year’s bear market and long focused on the risk of a potential recession ahead, the stock market is rewarding companies that exceed expectations and dialing back the punishment of those that fall short. That’s a signal that a lot of bad news has already been priced in.