Looks like reality is finally sinking its teeth into the bottom up boys and girls with the most dramatic downward shift in earnings forecasts is in the small cap space going from +7.9% just one month ago to -21.9% today. And earnings season has barely begun!
As the accompanying table* illustrates (click image for clearer view), all 4 quarters are now projected to be in the red with the full year large cap number coming in at -12.1%.
With a full year operating earnings projection for the S&P 500 at $144.09 (down from $171.81 a month ago), today's P/E ratio of 19.36 (2790/$144.09) looks more than a bit rich. Then again, perhaps the thinking is the 400 car freight train called the US economy can restart like a sports car.
Reality may be starting to bite the bottom up crew but apparently asset and portfolio managers have yet to sunk their teeth into it.
(*Thank you Sam Stovall at CFRA for the data.)
(Click on image to enlarge)
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