There has been an interesting trend over the last two years. The naysayers about the US and global economies, including many who must be viewed as "perma-bears" have predicted that earnings will move lower.
Each quarter the earnings growth begins with a very high forecast by historic standards. The actual earnings exceed that forecast. The market response is much lower. The PE multiple for the overall market is reduced and justified by the argument that this "is the peak of the cycle."
Let’s take a look at the data from Thomson’s excellent reports.
What will be the cataylst? Perhaps something will happen to force the "hot money" players to decide that the worse has already been priced in. Since this process has been going on for years, that day may come soon.