FLEE - Earnings Still Matter

• With all the talk about inflation expectations, central bank policy, rising Treasury yields and fiscal policies, equity investors are trying to make sense of the market by focusing on the interest rate sensitivity of valuations and the tug of war between growth stocks and value stocks.
• But earnings growth, rather than changes in valuation multiples, remains much the most important determinant of equity market returns beyond a very short time horizon.
• We are currently in a high-growth environment. This strong growth will likely be reflected in second-quarter corporate earnings.

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