A view very well explained in just a few words...
Bank of America Merrill Lynch - "This week’s earnings news weighed on global stock markets. In the US, with nearly two-thirds of S&P 500 earnings reported, surprises have been positive in financials but negative in the tech sector. In EM, more than 60% of MSCI companies disclosing quarterly earnings have trailed expectations1. These headlines may be responsible for some of the recent drop in global equities but lingering concerns about global growth are another likely contributor. Conversely, recent global data suggest current activity is holding water. Could wobbling stock prices rather be a sign of muted growth ahead? What has been driving global equity prices?
Stock prices reflect more than economic fundamentals, but at times of heightened uncertainty there is greater focus on equities’ leading power on growth. Examining the main drivers of stock markets in the US and Europe, we find that equities have been supported by lower equity risk premia (ERP) rather than a rebound in earnings growth expectations. Looking ahead, however, the cyclical component of stock prices points to modest improvements in activity.
(...) However, policy uncertainty ahead of the US fiscal cliff remains high. Moreover, the dominant role of lower ERP in driving equities suggests that negative confidence shocks could hit stocks particularly hard."