(Reuters) – Wall Street set a record high on Tuesday, confirming that a decade-old bull market is still kicking following a slump late last year, even as corporate earnings stagnate and the U.S.-China trade dispute drags on.
The widely followed S&P 500 marked its highest ever close, beating its previous record closing high on Sept. 20, and the Nasdaq beat its Aug. 29 all-time closing high.
S - P - % - Dec - Selloff
The S&P 500 has rallied 25% from Dec. 24, reversing a steep selloff caused by fears of higher interest rates and uncertainty around U.S. President Donald Trump’s trade war with Beijing. Dec. 24 marked the bottom of last year’s selloff.
The S&P 500 has slightly underperformed European stocks over the same time period.
Graphic - S - P - World - Indices
(Graphic: S&P 500 vs. world indices Image link: https://tmsnrt.rs/2W3escq
But as the S&P 500 has recovered, corporate earnings growth has slowed, and even shrunk, following a surge last year on the back of deep U.S.corporate tax cuts. Analysts on average expect earnings per share for the quarter to fall 1.3% year over year, according to I/B/E/S data from Refinitiv.
Graphic - Earnings - Expectations
(Graphic: Q1 earnings expectations link: https://tmsnrt.rs/2W65kUo
While expectations for first-quarter EPS have improved over the past three weeks, forecasts for full 2019 EPS growth have become less optimistic, now at 3.0% growth, down from 3.3% at the start of the month. That is partly due...
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