Easy money = higher stocks? Think again

It seems intuitively obvious that easy money would find its way into stocks, but evidence on the ground is too thin

Last fortnight I wrote people are so awed by market behaviour in 2020 after the shock of Covid that even with the benefit of hindsight they are unable to find reasons to explain what could have driven the markets relentlessly and to such great heights. The most common explanation for stock price movements is earnings growth (“stocks are slaves of earnings”). As long as earnings growth is assured, stocks will move higher. If a company delivers much higher growth than expected, the stock would jerk upwards in what is called an “earnings surprise”. This was certainly not the case in