Stock prices seems to be on the rise in the course of the last two months, starting from the beginning of January 2019, while the profits are plummeting with bear trends. According to Fortune, the stock prices have become 17% more expensive in the period of only 60 days.
During the third quarter of 2018, the market achieved an all-time high, however, the value of stocks is presently considered to be overpriced as the stocks on S&P 500 went from being sold under the value to being traded at all-time high prices.
Forecasts Indicate Stock Prices to Rise by Over 3% in the Second Quarter
Now that the first quarter of 2019 is closely coming to an end, prognosis from Wall Street are said to be more realistic, given the rule at reports for expected stock prices at the beginning of each quarter are usually inflated.
Nevertheless, the current prognosis for Q2 2019 according to analysts who participated in a poll by FactSet have made a consensus on the matter of growths for price-per-share, predicting a rise of 3.7%, while the previous forecast implied a rise by 3% in price-per-share for the second quarter.
However, as the first quarter is coming to an end with March, the latest consensus is predicting that the prices would instead fall by -2.7%, expecting a rise by 7% later on at the end of the second quarter.
On the other hand, the Congressional Budget Office is predicting that the growth of GDP is set to proceed with further declines during 2019, stating that the annual rate could drop to 3.9%in the fourth quarter from 4.7% in the first quarter.
The realistic case based on the present market trends implies that there won’t be any of predicted surges by the end of 2019, while it is more likely that 2019 would end with -1.5% lower profits in comparison to the previous year.
