When the S&P 500 first hit 2,130 in May of 2015, aggregate earnings were $99.25 per share already 6.4% below the cyclical peak of $106 per share set in September of 2014. This means that stocks in May of 2015 were valued at a fairly high 21.5 Price to Forward Earnings Ratio, and that was based on falling earnings to boot. Earnings continue to fall to this day down to $87 pushing the ratio out to 24.5 which is getting quite steep. Now analysts, optimistic bunch that they are, figure earnings are going to explode higher as the year comes to a close, good luck with that. There’s an old saying on Wall Street about analysts, “you can’t trust them in a bear market and you don’t need them in a bull market”. Anybody who takes the time to look is going to realize fairly quickly that the official narrative is in fact a house of cards, and has been for quite some time now. Friday’s employment report is but the latest example.
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