Have market reactions to earnings always been this extreme?

After following the past two weeks' earnings reports closely, I feel pretty baffled by the extreme reactions markets have shown both upwards or downwards depending on how earnings were interpreted.

We saw Facebook drop over 25% within a day ($200b of market cap!), Paypal drop 25% or Spotify drop some 23% as well.

On the other hand, AMZN is up about 13% after market close, Google gained about 11%, as did AMD right after earnings.

The overall sentiment of the market may play a big role here, but is it only me who feels like these reactions are more extreme than they used to be? I cannot recall a time where a single report could erase or add hundreds of billions of valuation within an hour or two.

What are you guys' thoughts about this? Are these market reactions symptomatic for a stock market that has simply run too hot over the past few years? Is it a temporary effect or should we get used to such extreme reactions?

I'm looking forward to hearing your takes. 🙂


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