Following a bumper year for earnings in 2021, investors expected earnings normalisation in 2022, with many of the distortions arising from the pandemic starting to diminish.
However, the last few months have presented investors, and companies, with a new set of challenges stemming from the invasion of Ukraine and China's zero-Covid policy. This is feeding into rampant and more persistent inflation, a more aggressive US Federal Reserve, rising bond yields and worries about slowing global growth. These factors paint a worsening outlook for the pace of corporate earnings growth in the second half of 2022. Over the last two years, we have seen a disconnect between the economy and the stock market. Stocks have done well, the S&P 500 was up 27% in 2021, yet the...
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