As markets are showing slowing growth, commonly marked with bear trends alongside showcasing side-effects of trade tensions that are still active and in progress, S&P 500 is at risk of hitting the lowest score in the course of the last three years.
Along the way, some watchdogs believe that the market is dipping towards even worse conditions as investors have low expectations, while investors believe that risks in earnings that are slowing down has to be appreciated.
Moreover, the head of RBC Capital US Equity Strategy, Lori Calvasina, believes that the market hit the bottom for the year back in January, however, Barry Bannister’s strategist, Stifel Nicolaus, considers that it is yet too soon to call for a past dip and indicate that the market is in the midst of recovery.
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According to Stifel Nicolaus who is working on the position of a strategist at Barry Bannister, it is too early to say that the market is on its way to recovery, referring to the case that some watchdogs alongside RBC Capital’s head, Calvasina, believe that the market took a dip in January, indicating that the market is now going through a recovery.
In the meanwhile, outlook for the first quarter of 2019 seems to be experiencing downfalls even with the positive claims that the market is in the process of recovery, while the second quarter doesn’t look promising either.
To confirm the case that earnings expectations are getting lower with earnings slowing down in 2019, John Butters, FactSet’s senior earnings analyst claims that there are more companies are reporting cuts to earnings forecast, showcasing lower expectations.
Additionally, expectations for earnings per share have declined by 7.3% with the first quarter of 2019, compared to a drop by 3.2% that represents an average decline for the period of the last 5 years.