The S&P 500 Is Expecting Something Extraordinary. History Says Investors Should Be Careful What They Wish For.
If you pay attention to current Wall Street expectations, you’d have good reason to feel bullish.
LSEG is currently forecasting S&P 500 (SNPINDEX: ^GSPC) earnings growth of 31% year over year in the third quarter. Of course, this is heavily driven by growth in the tech and semiconductor spaces, but energy could also make a big contribution.
This would sound like a great time to buy stocks with that kind of fundamental strength existing in the background. Plus, the forward price-to-earnings (P/E) ratio for the S&P 500 has actually dropped slightly to 21. In other words, the recent rally has been driven largely by earnings growth, not multiple expansion. That’s also a good sign for a sustainable rise in stock prices.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.