Financial Advice for Retirement, Social Security, IRAs and Estate Planning

Are Earnings Peaking?

August 9, 2018

The stock market’s done well lately because of strong earnings growth and expectations that growth will continue. Liz Ann Sonders of Charles Schwab discusses whether that level of growth is likely to continue and what that means for stock prices. She’s cautiously optimistic, but does think earnings growth has peaked even if earnings haven’t.

The net is that the “breadth” within the stock market and the economy suggest sustainable strength—but not likely at the current pace. Both the economy’s and earnings’ growth rates may be at or near peaks; although positive growth is likely to persist. The most notable risk to economic and earnings growth looking forward is the ongoing trade skirmish (war?). In fact, the topic has increasingly become prominent in quarterly corporate earnings conference calls.

 

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