Stock Prices Expected To Dampen

U.S. stocks have been rising as the Federal Reserve is expected to slow the rate increases, but investors are cautiously optimistic. Some analysts expect 5 percent annualized earnings for the calendar year 2023, while other investors expect downward revisions with a potential recession and interest rate increases affecting companies’ bottom lines. The ratio of a company’s share price to its earnings can be used to determine whether a stock is cheap or pricey and if earnings drop, that could make the market look overpriced.