Summer results season grounds for optimism in crisis-led financial year

Having recorded further heavy losses in early 2009 to reach a low point in March, share prices have rebounded strongly in recent months.

Unprecedented intervention from the leading monetary and fiscal authorities has assuaged fears of a systemic financial crisis. As a result, credit markets have stabilised, while equities overcame a number of critical hurdles in the spring – the US bank stress-test results, the Chrysler bankruptcy, a difficult first quarter results season and the risk of a global flu pandemic. The summer results season has given investors further grounds for optimism, as there has been a succession of high-profile earnings upgrades. Significantly, the three-month earnings revision ratio – which reflects t...