In today’s Tip TV Finance Show, Darren Sinden, Market Commentator for Admiral Markets, presents the case for US equities, the S&P 500 and What to expect in the Q3 earnings season.
US equity valuation – fair or foul?
Sinden explains that the earnings of US stocks is slowing down, with Q2 15 being the weakest quarter over the last decade in terms of positive earnings surprises. On valuation, Sinden comments that the US equities remain overvalued at current levels.
Warning for the S&P 500?
Sinden takes a look at the earnings expectations trajectory for the S&P 500 index, and explains that the expectations for 2016 has been falling and will probably continue to fall while the expectations for 2015 trends in a flat line. He believes that this downward trend doesn’t bode well for the equity index.
Sinden further says that the weaker earnings outlook in 2016 suggests a further correction looks warranted in the index. The S&P 500 index remains well ahead of the forward PE ratio despite the recent correction in equities, notes Sinden.
US equities: What to expect in Q3 earnings?
Sinden believes that the S&P 500 index will likely see negative growth in EPS and revenues within Q3.