Despite the stocks have risen, investors are less optimistic about the global economy and the current forecasts. As one can see in the Figure 1, the earning has reached 7.3% while the revenue rose 5.9%. However, those figures have not helped to improve the investor expectation. "Companies warn that the current quarter will be more challenging. That is why the earnings of S&P companies will, probably, rise just 1,7%". The main cause is that companies fret over uncertain outlook although they know that the economy is improving. So, many executives see shrinking economies in Europe and US.
Figure 1
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| http://online.wsj.com/article/SB10001424127887324906004578290272098212876.html?mod=WSJ_hp_LEFTWhatsNewsCollection
All in all, I am wondering how the policymaker can help to recover the investor confidence in the market? Keeping in mind that investors are ignoring the economic indicators.
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I think if the economy continues to improve, so will the confidence in it. I think it's smart that people are being careful in the sense that the Global economy isn't improving a whole lot right now. If unemployment continues to improve and the earnings also continue to improve the investors will follow. The policy makers just need to keep the economy improving and investors will follow.
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