I did a bit of research on corporate profits. You can see a chart which shows that CPs rose above its long-term average in the second half of 2016 for the first time in four years. Meanwhile the market jumped 75% over the same period.
I see this going one of two ways: either CPs outpace the market return, which brings the market valuation down to a more normal level. Or investors bid up the market on the increased profits, which ultimately leads to a price crash (mean reversion always wins).
I'm hoping for the former.
Submitted May 02, 2017 at 06:42AM by TheMacroEvent http://ift.tt/2qzrH4y
