Monday, October 12, 2015

Earnings Expectations ..........ANOTHER PESKY FACT!

Earnings Expectations

Expectations for earnings growth have been increasingly bleak.

Wall Street strategists have been warning that we're looking at negative growth.

For Q3 2015, the blended earnings decline is -5.5%. This is the first back-to-back quarters of earnings declines since 2009.

This is a big deal because earnings are the most important drivers of stock prices.

The last time we had consecutive quarters of negative earnings growth, the US economy was in recession.  It's particularly unnerving to see that we may be in the middle of a third consecutive quarter of negative earnings growth.

This past week marked a change in the aggregate expectations of analysts from flat year-over-year earnings (0%) for Q4 2015 to a decline in year-over-year earnings for Q4 2015.

These deteriorating numbers instill no confidence as sentiment sours and market volatility remains elevated.

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