Things have changed for the future of U.S. stock prices! First, the data for the first several trading days in June indicates that investors have shifted their forward-looking focus from the fourth quarter of 2012 to the first quarter of 2013:
Next, let's look at how that shift in focus translates to the expected level of trailing year dividends per share through the first quarter of 2013:
The final note on our chart above is significant, because as of 6 June 2012, the level of noise in the stock market has significantly spiked upward, largely on the combined speculation that the European Central Bank will act to bail out Spain's failing banking institutions, and that the Federal Reserve in the U.S. will attempt to shore up the U.S. economy, which has fallen into something of a microrecession (side note: as expected) in the second quarter of 2012.
And today, China's central bank has announced a surprise interest rate cut, which stands to further boost the central bank intervention-driven noise event that succeeded in pushing stock prices up so dramatically on 6 June 2012, as the markets recorded their best day to date in 2012.
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