U.S. leading indicators dropped 0.3% in December, marking the fourth decline in five months; with November, which was flat, being the exception. Crude oil is dropping, indicative of slowing global growth; yields are dropping again, to a low 1.7 handle for the ten-year U.S. Treasury note; ISM manufacturing has been negative for five months; and U.S. corporate earnings growth was negative for 3Q19, as measured by the S&P 500. I don’t want to be a pessimist, but equity prices are surging in the face of all these contra-indicators and, based upon my earnings forecast, approaching a 20 P/E. I would not pay the current prices for equities, as their underlying fundamentals are weakening. Make sense?
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