Today’s post by Tlotlego Tshegare shows that the JSE share price index and corporate earnings display a strong long-term correlation, despite extended periods of meaningful divergence. Prices have frequently rallied during weak earnings cycles, demonstrating that global liquidity and investor sentiment play as crucial a role in driving valuations as underlying fundamentals. This contrasts with US equity indices like the S&P 500, where a sustained tech boom has driven a far wider, more persistent disconnect between stock prices and corporate earnings.
