Why don’t stock prices always increase when companies beat earnings forecasts?

…Jeff deGraaf, Chairman of Renaissance Macro Research, says no. He postulated recently that when markets have muted response to good news, it’s a sign that the 90- to 180-day forward performance quarters will be better than companies who beat earnings forecasts outright…say, in the first quarter of this year. He thinks that good earning stocks will disappoint at the cusp of the quarter, basically, the last two days of the current quarter and the first few days of the new quarter. It’s just his theory, however. But it is an interesting idea that markets which ignore bad news would, conversely, perform poorly. If you’re a market bull, then you can “hold” when your stocks don’t shoot up on solid earnings reports. MarketWatch

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