Once again, we are seeing the usual hand-wringing over the fact that after a 17 percent rally from the December low, some of the stock market's sector leaders are meeting resistance.
The key to getting markets moving again is to stop the decline in earnings estimates. There are signs that is happening. That's because corporations typically provide conservative guidance and beat estimates by a roughly 3-percentage-point margin. If the estimates are calling for earnings to be down 1.3 percent right now, and if they stay in this range, it's likely earnings will be up somewhere in the 1 percent range."While EPS estimates have gone lower, they have not fallen nearly as much as feared," Nick Raich, who follows corporate earnings at Earnings Scout, told clients on Thursday.
Finally, maybe it's time we all got more reasonable with future expectations in the stock market. With the S&P up nearly 10 percent this year, investors have become used to the idea of an endless up spiral in the next decade. Maybe it's time to temper that.
Now I am starting to worry
You seam tired and stressed
You can else Pause
Dollar is expensiv
We need earnings for this rally to go anywhere. A Fed pause is only a good thing if it leads to earnings growth.