Dennis R. Capozza and Ryan Israelsen hypothesize that in markets where information costs, transactions costs and the economic impact of information can vary widely, we should expect both significant predictability and systematic variation in the predictability.
Those latest earnings forecast, are implying an economic soft-landing, not an outright severe recession. Historically, the SP500 EPS change during a recession was a decline in the high teens. That said, with the SP500 losing nearly a quarter of its value YTD, investors clearly have embraced less robust prospective earnings than what the consensus estimate is suggesting. […more]