The SP 500 is down roughly 10% – 11% from its late September ’18 high and yet market bearishness is the highest in 6 years ?
Here is the SP 500 earnings data: (Source IBES by Refinitiv)
- Fwd 4-qtr est: $170.53 vs last weeks $171.05
- PE ratio: 15x
- PEG ratio: 1.9x
- SP 500 earnings yield: 6.56% vs last weeks 6.50%
- Year-over-year growth of fwd est: 8% vs last weeks 8.4%
Summary / Conclusion:
Here are the technical levels being watched
- November ’18 SP 500 low – 2,631.09 – we’re through that level
- October ’18 SP 500 low – 2,603.54 – the SP 500 closed below that level Friday, December 14th, 2018
- Last weeks (Dec 10) low – 2,583
- Feb ’18 and 2018 low – 2,532 – still above
The fascinating metric this week is that – with the SP 500 earnings ending the week at 6.56% – its the highest print on my spreadsheet since January 2 ’16 or just prior to the end of the 2015 – 2016 correction.
That Jan 1 ’16 SP 500 earnings yield was 6.62% so not much higher than Friday’s close.
Something has to give – either SP 500 earnings roll over meaning the forward estimates start to decline, or we start to see a bid under stocks. Banks seem awful cheap – here was the blog post from last night.
More to come on Sunday morning.
Thanks for reading…