'Jaws' Music Creeps Ever Louder
The summer rally is a welcome relief from the strife that engulfed the markets this spring, but unless the fundamental underpinning is sustainable, "this sucker could go down" at any moment. I feel far more comfortable when a rally is accompanied by rising earnings estimates for the index (typically, in the S&P 500). Rising estimates mean market participants are underestimating the earnings power of corporate America, and better earnings usually lead to higher stock prices.
So I was surprised and concerned when I recently ran the estimate trend for the S&P 500. I assumed that, with a strong market, estimates for the year must be creeping up again. Au contraire!...289 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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