Earnings – “To Infinity and Beyond!”

During the last year, the S&P 500 has turned on its booster rockets – booming earnings momentum! Since the EPS rockets have been firing, perhaps understandably, investors increasingly sound like Buzz Lightyear – “To Infinity and Beyond!”

Undoubtably, should EPS momentum remain as supercharged as it has since AI excitement highjacked the financial markets, infinity may prove a reasonable target for this bull market. However, the question isn’t how good earnings “have been”, it’s whether they will remain as strong as most now anticipate? Will the forces elevating EPS continue to strengthen or are pressures emerging which could dampen trends and disappoint expectations?

What follows are a few charts indicating the EPS outlook could face some increasing challenges.