UPGD - Priced For Perfection
2025-05-02 03:40:00 ET
Summary
- The S&P 500 is now trading at 21x the projected earnings growth rate of 9% in 2025. That is an extremely rich multiple on a very optimistic earnings growth rate.
- A parade of companies are now pulling away revenue and earnings guidance for the second quarter, which is a very rare occurrence indeed.
- The stock market has already priced in the imminent removal of all tariffs and the Fed’s “PUT” being deployed (think lower interest rates and QE).
- Economists are warning of “Covid-like” shortages and significant layoffs in industries spanning trucking, logistics, and retail.
The S&P 500 is now trading at 21x the projected earnings growth rate of 9% in 2025. That is an extremely rich multiple on a very optimistic earnings growth rate, given the fact that US GDP shrank during Q1. And that shrinkage will soon be combined with significant margin pressure from the tariff chaos that began at the start of Q2....
Priced For Perfection