After a 152.53-point gain for the Dow Jones Industrial Average on Friday, Dow futures were up 85 points, or 0.3%. S&P 500 futures have advanced 0.3%, while
futures have risen 0.4%. The
clinched its second-highest close in history Friday, while the Dow finished less than 1.5% below its record close
We’ll get lots more on the earnings front this week, including
but also a Fed meeting, where a rate cut is widely expected. Plus jobs data is due Friday and ahead of that other updates worth watching.
The doom-and-gloom crew has been drawing lines between the dot-com bubble and the current market climate for a while now. Obviously, with stocks banging out record highs on a regular basis, those forecasting a collapse can’t catch a break.
But hey, it’s almost Halloween, maybe it’s their time to shine.
In that spirit, noted bear Albert Edwards of Société Générale sent a chart to his clients showing how earnings have diverged from the S&P 500 to a degree not seen since, yes, 2000.
What’s it mean? “Carnage awaits,” Edwards wrote in a note to clients over the weekend. Specifically, he warned that surging tech stocks have disconnected from the reality of earnings at a problematic time.
“The unfolding profits recession will expose the ‘growth’ impostors and they will collapse, as they are on the wrong ‘growth’ PE valuations with the wrong EPS projections,” he said. “Just like in 2001, investors will not wait to distinguish true ‘growth’ stocks from the impostors. Investors will slam the whole sector and work it out later.”
Write to Barbara Kollmeyer at firstname.lastname@example.org