The chart below can be downloaded here.
This week’s chart highlights two important points related to the central driver of stocks: corporate earnings growth. First, it shows just how impressive the year-over-year acceleration in sales and earnings growth was coming out of the unofficial industrial mini-recession in 2015. That acceleration caught investors flat-footed and drove the impressive gains in stocks we have seen over the last 30 months. Second, even if we take current consensus estimates at face value, earnings are poised to decelerate as we close out 2018 and head into 2019. This slow down in growth doesn’t mean the bull market is over per se, but it does suggest returns will be more subdued.
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