Excerpt of Bloomberg quoting DataTrek Research:
…. “The important thing to note, though, is that companies have been busy lowering their expectations at a more pronounced rate than usual, according to DataTrek Research. Citing FactSet data, DataTrek said 112 companies had issued second-quarter guidance as of the beginning of the week, and in 87 cases the guidance was lower than analysts’ expectations. This works out to a 78% ratio, higher than the five-year average of 70%. And it’s not like stocks are cheap. At 17.7 times this year’s estimated earnings, the S&P 500 is trading just above the average from 2014 through 2016, another time when earnings growth was nil. What this suggests is that stocks may struggle to move higher without more positive economic data. But that would likely cause the Fed to pull back on rate cuts, which has been the main driver of equities”….
Read the full article here on Bloomberg!