Souring S&P 500 Profit Outlook a Bad Sign for Stock Market Rally
- A key gauge of earning-per-share changes is now negative
- S&P 500’s valuation multiple is highest since April 2021
The New York Stock Exchange.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
Wall Street analysts are quickly scaling back their forecasts for Corporate America’s earnings growth over the next year, which could pump the brakes on the blistering stock market rally before long.
A key indicator known as earnings-revision momentum — a gauge of upward-to-downward changes to expected per-share earnings over the next 12 months for the S&P 500 — has slumped into negative territory and is hovering near its second-worst reading in the past year, according to data compiled by Bloomberg Intelligence.