The surprise in the corporate reporting season is not that it has been better than expected, but that “better than expected” is such a surprise to the market.
Corporate profitability is closely linked to the state of the economy, which determines many key variables such as volumes, pricing power, input costs, labour availability, borrowing costs and so forth.
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Jun Bei Liu is the founder and lead portfolio manager at Ten Cap. She formerly worked for Tribeca Investment Partners.
