SPX Forward Earnings Estimates Rise
NYSE and NASDAQ as NYSE volumes rose and NASDAQ volumes dipped from the prior session. No technical events of import were generated on the charts, leaving the mix of current short term trends intact. The data is unavailable this morning. And although the forward 12 month earnings estimates from Bloomberg have risen from $134.01 to $137.23, valuation at an 18.0 forward multiple remains near a decade high. Margin leverage is at extreme levels while investment advisors continue to display a high degree of complacency. As such, we continue to be of the opinion that risk is high versus potential reward given current levels and concerns.
- On the charts, the bifurcation of index performance persisted yesterday as the DJI (page 2) and DJT (page 3) were the only indexes that managed to close higher while doing so on negative breath and up/down volume as volumes rose on the NYSE. The DJI closed at resistance while the SPX (page 2) and COMPQX (page 3) closed near resistance. All failed to violate. The weakness in the MID (page 4) and VALUA (page 5) brought them back below their 150 DMAs. The near term trends continue to show a disconnect as the DJI is the only one in an uptrend with the SPX and DJT neutral. The remaining indexes are still in near term downtrends.
- In conclusion,. valuation remains high as does margin exposure and advisor complacency, given their current readings. We continue to view market risk as high versus potential reward.
- Forward 12-month earnings estimates for the SPX from Bloomberg of $137.23 leave a 5.56 forward earnings yield on a 18.0 forward multiple, near a decade high.
- SPX: 2,434/2,467
- DJI: 21,640/21,992
- NASDAQ: 6,192/6,346
- DJT: 9,118/9,422
- MID: 1,701/1,731
- Russell: 1,368/1,403
- VALUA: 5,425/5,519
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