• 751 days Will The ECB Continue To Hike Rates?
  • 751 days Forbes: Aramco Remains Largest Company In The Middle East
  • 753 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,153 days Could Crypto Overtake Traditional Investment?
  • 1,158 days Americans Still Quitting Jobs At Record Pace
  • 1,160 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,163 days Is The Dollar Too Strong?
  • 1,163 days Big Tech Disappoints Investors on Earnings Calls
  • 1,164 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,166 days China Is Quietly Trying To Distance Itself From Russia
  • 1,166 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,170 days Crypto Investors Won Big In 2021
  • 1,170 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,171 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,173 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,174 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,177 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,178 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,178 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,180 days Are NFTs About To Take Over Gaming?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

Stocks Have Gone Sideways While Earnings Have Tanked

S&P 500: Sideways For Seventeen Months

If stocks are driven by earnings, then it would be logical to assume that during a period of sideways action in equity prices that earnings would also remain basically unchanged.

SPX Daily Chart since October 2014

According to David Stockman's Contra Corner, earnings have been far from stable over the past seventeen months:

GAAP earnings of the S&P 500 in November 2014 were $106 per share on an LTM basis compared to $86.44 today. So earnings are down by18.5%, meaning that the broad market PE multiple has escalated from an already sporty 19.3X back then to an outlandish 23.7X today.


Has The Bigger Picture Improved?

This week's stock market video examines the case for new highs in stocks relative to the case for a bearish reversal.


GDP Estimates Are Dropping

Earnings estimates are not alone in terms of downward revisions. Forecasts for Q1 growth have also been dropping in recent weeks. From CNBC:

The CNBC Rapid Update shows a sharp decline in the outlook for first quarter GDP from a high of 2.3 percent to just 0.6 percent. Weakness has come from several sectors, led by trade but also including retail sales, inventories and manufacturing.

 

Back to homepage

Leave a comment

Leave a comment