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Strategies & Market Trends : Sonki's Links List -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (33)	12/22/1997 8:15:00 PM
From: Sonki	Respond to of 395

stockinfo.standardpoor.com Just a few weeks ago, the consensus earnings estimates for the S&P 500 for the fourth quarter in aggregate (year over year) was over 12%. Now, it is down to about 8%. Rack it up to whatever you want, but that is significant. And the repercussions for 1998 have not yet sunk in. For the first quarter, estimates are still above 15%. That is highly unlikely. This means that many companies have to start guiding Wall Street estimates lower if Wall Street doesn't do it on their own. If the fourth quarter comes in around 8%, and the Asian credit problems start to spread, the consensus estimate for all of 1998, currently close to 15%, has to come down. The S&P 500 still trades at a very high 23 times trailing earnings, based in large part on expectations of continued strong earnings growth. The stock market will have to deal with a steady stream of earnings estimates reductions for 1998.