Of course, a major concern among investors is that slower global economic growth outside the US and a stronger dollar will weigh on S&P 500 earnings per share. That’s why I lowered my forecasts last week to $125 in 2015 and $135 in 2016, down from $130 and $140 previously.
On the other hand, it is interesting to note that US stocks tend to outperform stocks in the rest of the world when the dollar is strong. That’s because this generally happens when the US economy is outperforming the overseas economy. On a ytd basis, the US continues to outpace the other major MSCI stock prices indexes (in dollars): US (11.4%), All Country (4.1), Emerging Markets (0.2), Japan (-3.9), UK (-5.6), and EMU (-7.3).
Today's Morning Briefing: London Days. (1) Tour of London. (2) Taxi vs. limo drivers. (3) “The Knowledge.” (4) Attack of the socialized students. (5) Worrying about both high P/Es and a melt-up in the US. (6) The new consensus on bonds. (7) Secular stagnation overseas, and no global recession in sight. (8) PMIs flashing global slowdown. (9) Waiting for wage inflation and Fed normalization. (10) Putin needs higher oil prices. (11) Is a strong dollar bearish or bullish for US stocks? (More for subscribers.)
