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Stock Market Analysts Keep Downgrading 2019 Earnings Estimates And Why You Should Worry

Stock Market Analysts Keep Downgrading 2019 Earnings Estimates.  Ultimately stock prices are driven by earnings. Stock analysts have been downgrading 2019 estimates on company operating earnings (see the charts below). As a result,  a clear warning that the markets this year will become increasingly treacherous.

But why hasn’t the market done worse?  In fact, there has been a growing consensus that recent market support and surges have been propelled not so much by investors, but rather by companies buying back their own stock. Earnings decreases and slowing growth also mean companies should become increasingly unwilling to tap excess cash or use debt to execute buybacks. This means even more trouble ahead for the stock market.

Stock Market Analysts Keep Downgrading 2019 Earnings Estimates And Why You Should Worry
Stock Market Analysts Keep Downgrading 2019 Earnings Estimates And Why You Should Worry

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Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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