This paper studies the stock market's reaction to aggregate earnings news and better understand the relationship among earnings, stock prices, and discount rates Prior research shows that, for individual firms, stock prices react positively to earnings news but require several quarters to fully...

Prior studies use fundamental earnings forecasts to proxy for the market's expectations of earnings because analyst forecasts are biased and are available for only a subset of firms. We find that as a proxy for market expectations, fundamental forecasts contain systematic measurement errors...

Prior studies use fundamental earnings forecasts to proxy for the market's expectations of earnings because analyst forecasts are biased and are available for only a subset of firms. We find that as a proxy for market expectations, fundamental forecasts contain systematic measurement errors...