International stock markets have been weak for several quarters measured in US dollar terms and it appears that may be affecting the US stock market. As of tonight’s (October 10th) close the S&P 500 has contracted 4.9% from its all time high reached on September 20 with most damage occurring in the past six days of trading. Today alone accounted for 94 points of the 144 point decline in the S&P price level. While the pain has been deep and swift as the market adjusts to a higher interest rate environment, economic trends remain supportive of further earnings, revenue and market gains. This week’s chart shows analyst expectations for S&P 500 earnings and sales levels, and it does not appear that the upward advance is rolling over or stagnating. That could change as earnings season arrives but, for the time being we view this sell-off as a bull market consolidation.
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