According to the Department of Commerce Data, Q2/18 Quarterly annualized GDP growth came in at the best level since 2014, and the “final sales” component came in with the best reading since 2006.  Add to that the University of Michigan Consumer Sentiment Index that remains near the cycle high, and you get a very strong economic and earnings backdrop through year-end.

As we have said, there can be a 2-5% correction at any time given (1) the overbought condition of the market, and (2) the fear of what such strong growth will cause the Fed to do – but we continue to point out the direction of the market moves with the direction of earnings.  We are very comfortable with our 20%+ growth estimate for 2018 S&P 500 (SPX) operating EPS, and target of 3200.

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