S&P 500 Earnings Stuck at 2011 Levels, Stocks up 87% Since

Jon Blogosphere, Economy, Market Commentary

Grounded in some sort of new reality? LOL
The S&P 500 stock index edged up to an all-time high of 2,351 on Friday. Total market capitalization of the companies in the index exceeds $20 trillion. That’s 106% of US GDP, for just 500 companies! At the end of 2011, the S&P 500 index was at 1,257. Over the five-plus years since then, it has ballooned by 87%!
These are superlative numbers, and you’d expect superlative earnings performance from these companies. Turns out, reality is not that cooperative. Instead, net income of the S&P 500 companies is now back where it first had been at the end of 2011.
Hype, financial engineering, and central banks hell-bent on inflating asset prices make a powerful fuel for stock prices.

This post was published at Wolf Street by Wolf Richter ‘ Feb 19, 2017.