There’s plenty of reasons for doubt. A full-fledged trade war will likely weigh on export demand and overseas profits of multinational firms. At home, inflation remains sticky and the US Federal Reserve appears in no rush to cut interest rates.
Beneath a solid fourth-quarter earnings season, there’s a worrisome development that may put a dent in the bull case for US stocks: Corporate America’s profit outlook is souring.
Among companies that have issued guidance for next quarter and beyond, more have provided estimates that trail analysts’ expectations. A gauge of forward earnings that compares companies’ forecasts with analysts’ projections is the lowest in a year after plunging to a level last seen in 2016 earlier this month, data compiled by Bloomberg Intelligence show.
