Company results and GDP growth: A divergence that investors will have to get used to

- "The results of listed companies improved sharply in the first half of 2010, while growth remains sluggish in the euro zone and the economic situation is deteriorating again in the United States. Equity investors are therefore faced with this divergence between results and growth which makes it hard to decide whether now is the right time to invest in equities."
- "We believe that this situation will be long-lasting. Like in Germany and Japan since the end of the 1990s, the United States and the euro zone as a whole are likely to be characterised by distortion of income sharing in favour of companies and to the detriment of wage-earners, which explains the divergence between results and growth. The divergence is also due to the global diversification of the large listed groups."
- "An analysis of the pattern of events in Germany and Japan should provide information on the resulting effects of these diverging profit and growth trends on the stock market."
- "In Japan, the stock market index was clearly adversely affected by such configurations, but not in Germany, which makes the effects of this situation hard to predict."

Natixis Flash Economics 405 20100824

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