After last weeks equity drop, here’s a few numbers that give investors the pause that doesn’t refresh. When the rally began last March, the P/E ratio for the S&P 500 based on 4 quarters of operating profits was a moderate 14. Now, it’s 27. According to the NYT, ” Even if you use a more conservative profit gauge — 10-year averaged earnings, a measure that smoothes out wild swings — you find that valuations have begun to soar. In March, the price-to-earnings ratio for the broad market using these “normalized” earnings was 13.3, well below the market’s historical average of … …READ MORE
Tag Archives: US Stocks
Earnings, Nothing But Earnings….
With huge equity rallies from the lows across Japan, US, and China, markets are trying to decide if this is anticipation of growth or if it’s the euphoria from surviving a near economic-death experience. Unfortunately with retail sales and industrial production collapsing around the globe, it should come as no surprise that earnings for companies worldwide are a disaster.
The canaries in the global trade mine are China and Japan. Chinese growth is expected to slip to 6% this quarter as the global economy has seen a massive drop in demand for their exports. Japan is experiencing a similar situation. … …READ MORE
