Like Wile E. Coyote, stock prices often seem to levitate after fundamentals have started to deteriorate. Wile E., as you might remember from Road Runner cartoons, often ran off the cliff. But he fell into the abyss only after he noted he was no longer on solid ground. Investors often do not notice they are no longer on solid ground until the stock price has declined and the losses are real. Problems often show up in the course of daily events and do not seem to have an impact on the price of your favorite stock.
Investors discount negative news because the stock price seems to ignore it.
However, behind the scenes, important investors might have begun to sells shares even while the stock price advances or holds even. If the negative news about a particular stock or sector of the market continues, sooner or later the stock prices will break or decline sufficiently for investors to change their attitude. Importantly, the attitude change occurs after the prices have declined and investors have losses or much smaller profits. All these notions are prologue to the current stock market and the prices of some technology stocks. Barron's recently reported that many companies that manufacture telecommunications equipment have been lending money to their customers, the telecommunications companies, in order to maintain their sales growth.