After adjusting to dovish Fed tone and improving energy fundamentals, markets need to see profit growth to move higher; otherwise a flattening trend could linger

Here's What We're Thinking - April 5, 2016

Written by Alison Plaxin
April 6, 2016

Equities: Canadian and U.S. equity markets have recovered from the slump earlier in the year and are now trading near YTD highs. It is important to note that this improvement has been driven purely by sentiment, as earnings estimates have actually grinded lower since the beginning of the year. This means that valuation (forward 12-month P/E) has retraced to the high end of the historical range (S&P500 and S&P/TSX Composite both currently at 16.7x), suggesting that any further meaningful upside now has to come from earnings growth

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