Twelve Charts This Week - 5/17/2024

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The market is trading near all-time highs and some valuations are stretched. These facts make some people nervous about an impending correction. Such a correction could come due to a macro event, for example higher than expected inflation or a worsening foreign crisis. But looking only at EARNINGS EXPECTATIONS FOR 2024, the market looks well supported for now. Shown in the chart are the declines in earnings expectations one year forward. In 2023, expectations started falling in January, then kept falling for three months and remained range-bound for the rest of the year. The average of the same series since 1996 shows a similar decline of expectations starting in January until October or November. This year by contrast, according to Edward Jones, earnings expectations have fluctuated with small declines, but they are nearly back to where they were at the start of January. (via Edward Jones)

READ MORE > > > Earnings illuminate the path through the inflation haze.