The recent market downturn is cause to wonder if we're in the early stages of a market correction. As we entered the year, investors were looking for 26% earnings growth from S&P 500 constituents while economists were looking for 3% GDP growth (consensus). Per Dave Rosenberg, at Gluskin-Sheff, 65% of the companies have reported and, ex Financials, earnings growth has been 16% while gross revenue growth has been 2%. These results should cause investors to rethink their 2010 earnings expectations and price equities accordingly.
Biggest concern after listening to the State of the Union address last night regards "doubling exports in the next five years". As has been noted several times this morning on other sites, doing so not only involves producing goods other markets want but stimulating demand in those markets.Easier said than done - most easily accomplished by devaluing the dollar!