This adds strength to my forecast that markets will take out not...

This adds strength to my forecast that markets will take out not only Covid lows but GFC lows also. If the consumer is to busy repairing the household balance sheet to actually "consume" regardless of a pause in interest rate rises the pressure on compan

y profits from reduced sales / leading to discounting) and increased wage pressure and materials costs mean company profits are going to get slaughtered. I turn the PE ratios that are allocated reflect the negative growth. S&P 500 Earnings is at a current level of 197.89, up from 197.88 last month ( March 22) and up from 128.20 one year ago. It was $116 pre Covid before the massive fiscal stimulus that has now been withdrawn.

Companies basically enjoyed the acceleration of 3 years profits into two years and now it's time to pay the piper.

With reduced consumer demand and increased costs I can see those Dollar earnings falling to $80 and PE ratios falling to below the historical median of 14.89 from current levels of 19.33.

On dollar earnings of $80 this would give the S and P a level of 1200.

We may face a lost decade of market performance so ridiculous were the excesses in the recent bull run with PE ratios in single digits.

Its not unreasonable that PE ratios on the back of negative warnings growth falls to single digits resulting in resulting in GFC lows.