Greenlight Warns of Earnings Risk to Market After GE Charge

David Einhorn’s Greenlight Capital warned that earnings degradation poses a risk to stock markets already trading at high levels.

“At year-end, first quarter earnings were supposed to grow about 5 percent, but now, they are expected to decline by a similar amount,” the New York-based firm wrote in a letter obtained by Bloomberg. “This level of earnings degradation poses a risk to a market trading at a premium multiple of earnings assisted by record high margins.”