U.S. stocks continue to set new closing highs on a daily basis this summer. This is fantastic. But for these latest price gains to be sustainable, they have to actually be supported by the beef of rising corporate earnings. Otherwise, a valuation air pocket forms that eventually becomes unsustainable with stocks eventually falling back to reality no matter how low Treasury yields might be. The bulls frequently claim that stocks are rising today in anticipation of higher future earnings, and indeed analysts are forecasting a bang up 2017 in this regard. But where exactly is the beef behind these robust predictions of record corporate profits in the coming year?
Please click on the link to read more of my article on Seeking Alpha.