At current levels the stock market is paying above average prices for projected sales growth and margins that shatter 15-year records. There have been some believable signs of earnings improvement, but the markets may already have priced this in.
First quarter 2016 earnings expectations as of the end of April are for yet another quarter of sales and earnings contraction. Excessive optimism has been a consistent theme for more than a year. Is it possible for the market to grow the estimated 15% by year end?
Earnings season for the first quarter of this year is virtually complete. We are witnessing consecutive quarters of earnings contraction not seen since 2009. The hope that revenue and earnings growth would have resumed by now has been postponed until the second half of the year.