This is the longest earnings recession without an economic recession (if it hasn’t started). The collapse in bond yields implies fwd EPS growth will go negative which is almost always accompanied by multiple contraction. #recession pic.twitter.com/PSvup36eku
— Greg S. (@GS_CapSF) November 6, 2019
- The S&P 500 forward earnings year-over-year growth has slowed to less than 1% from a cycle peak of 23% just 14 months ago, UBS says.
- Declining earnings expectations don’t bode well for stocks as the last six times in the past 35 years have all seen compression in stock valuation and declines in the S&P 500, the bank says.
- “There is no debate on S&P 500 forward earnings: a contraction appears imminent,” says UBS equity strategist Francois Trahan. “An actual contraction in forward earnings usually spells a difficult backdrop for the overall equity market.”
— Jeff Richards (@jrichlive) November 7, 2019