As a result of this slowdown, earnings per share growth of US companies has slowed almost to a standstill. 12 month rolling earnings per share is almost flat as we move through the first, second and third quarters of 2019. There is a promised rise in the fourth quarter, but we will have to wait until the fourth quarter, to see if those better 12 month rolling earnings per share actually occur.
Right now, we make fair value of the S&P500 at 2757 points. The S&P500 has fallen from a level 225 points above that valuation in recent days.
All that is happening is that the slower growth, inflicted on the US economy by Fed tightening, is now having a slowing effect on US operating earnings per share growth. (Again, this slowdown has nothing to do with trade).
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The US equities market is adjusting to these slower earnings per share growth and, as a result, is declining to a level of valuation which is much more suitable to current fundamentals.
Conclusion
The US economy has slowed from a growth rate of around 3% per annum, to a growth rate of around 2% per annum. This slowdown has nothing to do with trade policy. It is the result of gradual tightening of monetary policy by the Fed.
As a result of this slowdown in growth, earnings per share growth has also slowed. Right now, we make fair value of the S&P500 at 2757 points. The S&P500 has been falling towards that level.
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