The Wall Street chorus may be bearish, but this strategist points out stocks do better when earnings fall

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Markets are "forward-discounting mechanisms engaged in an ongoing operation," and investors best remember that, says strategist Seth Golden.

According to some analysts, equities just aren’t worth the risk right now. If this chart from a recent JPMorgan client survey is any indication, investors may be thinking the same:

What investors are forgetting, and maybe Wall Street too is that “markets are forward-discounting mechanisms engaged in an ongoing operation,” said Golden, in a blog post. He notes how earnings per share rose in 2018 and 2022, yet the market fell in both years, which likely means markets were forward discounting the chance of earnings per share slowdowns in 2019/2023. His chart below shows how markets have been higher 77% of the time since 1930, despite weaker earnings:

While his team is more focused on the S&P 500’s performance, Golden said they are watching out for weakness to add exposure to several big name stocks, including Amazon.com AMZN , PayPal PYPL , Boeing BA , Visa V , JPMorgan JPM and the healthcare Select Sector SPDR XLV to name a few.

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Castrated choristers provide a bullish return as grown men in terms of the higher notes they are capable of generating.

After the stocks fell due to recession, it is expected that the stocks would rise again

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