Stock prices are reflecting those rising expectations. At the end of 2018, with fears of an earnings recession on everyone's mind, the forward earnings multiple for the S&P 500 was 13.9, well below the historically normal range of 15-16.Raich emphasized that a higher earnings multiple could be justified if there were a clear sign the global economy was improving and that earnings growth will resume, but that is still not clear.
His thinking is that most analyst estimates overstate the final numbers by 3 to 4 percentage points, so 9% earnings growth would translate into 5% to 6% growth.Trade and tariffs: , which has shrunk its float 30% in five years, but its stock has dropped almost 80%. At some point, he said, you need to find ways to keep growing the business.High risk. It's unlikely 2019 marked a bottom in the global economy, as so many are anticipating. "Nothing has really changed in Europe. Things turn around when there are structural reforms, or when capital gets even cheaper," he said. "None of that has changed."High risk.
BobPisani Earnings? Fundamentals? What are those in this fed induced bubble?
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