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Market Update: 09-09-19


John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

We recently lowered our 2019 S&P 500 Index earnings growth forecast. In our August 19 Weekly Market Commentary, “Tweaking Forecasts,” we lowered our 2019 expectations for growth domestic product (GDP), the 10-year Treasury yield, and S&P 500 earnings per share (EPS). Our revised S&P 500 EPS forecast is now $165 for 2019, and we initiated a 2020 forecast of $175. Importantly, we have maintained our year-end fair value target on the S&P 500 of 3,000, as we expect lower interest rates and inflation to support higher valuations. Here we provide more background on our reduced earnings outlook.

We lowered our 2019 S&P 500 EPS forecast last month, from $170 to $165, due to the impact of tariffs, lower business investment, and trade uncertainty. The revised figure, which is in line with consensus estimates (source: FactSet), represents 2-3% growth compared with...

Download the complete PDF with graphs here.

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