Bloomberg.com is reporting what I believe to generally be bad news for stocks, namely rapidly rising earnings estimates:
Analysts are raising earnings estimates for U.S. companies at the fastest rate since at least 2004 just as stocks post the biggest losses in 16 months on concern that the economy will sink back into a recession.
Profit for Standard & Poor’s 500 Index companies will jump 34 percent in 2010, compared with a projected gain of 27 percent on March 29, according to more than 8,000 estimates compiled by Bloomberg. The revision, the most during any quarter in at least six years . . .
Analysts such as Smith Barney's Tobias Lefkovich use peak earnings estimate revisions as signs of market tops, and massive earnings estimate cuts as signs of bottoms (think March 2009).
Whether prices have been cut enough to mark an intermediate bottom I have no idea, but I don't like the set-up here new recession or not. There was no recession in 1977 or 1978, but stocks stank both years.
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