Don't Worry "Everything Bad is Priced In"

The stock market has turned the corner. Everythig bad is priced in.

By now, investors priced in all the bad things they could price in: concerns about trade wars, geopolitics, rising rates and even fears that earnings growth peaked. But the economy is still growing and earnings are expected to grow by double digits this year and next,” said Karyn Cavanaugh, senior market strategist at Voya Financial.

“We must keep in mind that the first-quarter earnings have been boosted a lot by a one-time tax windfall. But second-quarter earnings are expected to grow by another 20% even without the windfall but as the underlying corporate tax cuts start to kick in,” Cavanaugh added.

Not Priced In

  1. Insane valuations
  2. Mideast war
  3. China slowdown
  4. Eurozone slowdown
  5. Change in attitudes towards stocks

Of those, number 1 and number 5 are standouts.

Mike "Mish" Shedlock

Comments (17)
No. 1-17
Tengen
Tengen

Looking further into the future, things will be really bleak when Boomers start dying in large numbers. They are (and will be) the last moneyed American generation. Once they're gone, the system will consist almost entirely of bankster algos trading with each other all day.

thimk
thimk

All is well in financiatopia , look at the VIX

truthseeker
truthseeker

Well it the Fed is really serious about continuing to raise interest rates for whatever reason,

truthseeker
truthseeker

even as the yield curve continues to flatten, this will continue to push the dollar up with the potential to cause all kinds of problems imo, so I don’t think this is priced in the market.

caradoc-again
caradoc-again

Boomers will leave stuff behind. Property etc. Deflationary supply of stuff but that can be increasingly taxed too. I suspect change will come in that area, or, although deflationary, the wealth transfer can have a beneficial impact somehow.