In terms of earnings fundamentals, things look very similar to early 2018, which is perhaps a warning sign. Then, as now, expectations for year-ahead earnings had surged higher -- in that case, thanks to a raft of generous corporate tax cuts. This time around, optimism already seems to have peaked ... which is no doubt one of the reasons why strats feel comfortable reducing their recommended equity allocations. Regardless, it is pretty clear that the rate of change of expected earnings growth will have to come markedly lower at some point -- though as 2019 showed, that’s not necessarily an impediment to equity gains.
