It is earnings season again on Wall street. We kicked off last week with mostly good numbers but at the same time see forecasts for the upcoming quarter a little dampened. This combined with the never ending Europe story caused markets to take a nice dip. Negative earnings expectations are predicted to be the highest since the 1st quarter of 2009, see below:
Adding fuel to the fire is the fact that while the S&P 500 continues to go higher, earnings expectations are falling, as illustrated below. This means that Wall Street is concerned about our economic recovery. We expect to be in a trading range here for a while as valuations have discounted the slow economic backdrop, but any catalysts such as QE3 actually working or some change to the EU situation will drive the market higher.
Granite Group Advisors 