Why do earnings and fed activity like CPI Reports and FOMC Meetings impact stock prices so much?
In: Economics
Market prices are often based on expectations rather than current facts. Projected revenues, interest rates, or other forecasted phenomenon all affect human expectations about how securities will perform in the future. And future profits are the factor that lead someone to buy in.
We try really hard to forecast revenues etc but ultimately, I wouldn’t pay more for a stock than I would expect to make by having it. And I wouldn’t sell a stock for less than I would expect to make by having it.
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