{"id":101626,"date":"2017-02-02T06:21:52","date_gmt":"2017-02-02T11:21:52","guid":{"rendered":"http:\/\/countingpips.com\/?p=101626"},"modified":"2017-02-02T06:21:52","modified_gmt":"2017-02-02T11:21:52","slug":"sp500-technical-analysis-too-much-optimism-over-quarterly-earnings","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/02\/sp500-technical-analysis-too-much-optimism-over-quarterly-earnings\/","title":{"rendered":"SP500: Technical Analysis – Too much optimism over quarterly earnings"},"content":{"rendered":"
February 2, 2017<\/div>
\r\n<\/div><\/div>

By IFCMarkets<\/a><\/p>\n

Too much optimism over quarterly earnings<\/strong><\/p>\n

US stock indices edged lower after hitting historical highs last week. Investors worry that probable rate hike by the Fed may raise the corporate credit burden. The first acts of US president Donald Trump which have more to do with the politics than with the economy, add uncertainty. Will the downward correction of S&P 500<\/a> index continue?<\/p>\n

Analysts forecast that total earnings of S&P 500 components shall increase by 7.1% and revenue by 4.2% in Q4 2016 which is quite a high hurdle. The current \u0420\/\u0415 ratio of S&P 500 is 20.6. This is far above the average for the recent 10 years of 14.7. Given the positive earnings expectations, anticipated \u0420\/\u0415 for the following 12 months is 17.6 which is above the average anyway. High \u0420\/\u0415 ratio may signify that stocks are overvalued. 125 companies from S&P 500 index will publish their earnings reports within the next 7 days. Their data may affect the stock indices. The index advanced 1.8% since the start of 2017 and 17.5% in the recent 12 months.<\/p>\n

\"SP500\"<\/p>\n

On the daily chart SP500: D1<\/b> is slightly correcting down having hit a fresh historical high last week. Its further decline is possible in case the negative corporate and economic data come out in US.<\/p>\n