Listening to Wall Street analysts, or their financial press cheerleaders, one would be left with the impression that earnings season has been gangbusters, and the recent 2-3 quarters of growth are sure to lay the basis for a new golden age in which EPS rises at double-digit rates for years to come. There are just a few problems with this wildly incorrect conclusion. First, after a year of earnings recession and a year in which earnings went nowehere, 2017 is finally catching up to where analysts said earnings would be two years ago, and that only due to a record liquidity and credit injection by the “developed” central banks and China.
Meanwhile, even as recent EPS growth has been strong, it was only due to a “base effect” as a result of a plunge in year ago earnings following tumbling Energy profits. As for the future, good luck to those double-digit gains in 2018.
There is another problem: as we discussed yesterday, despite the so-called coordinated global recovery, the difference between GAAP and non-GAAP continues to be 10% or higher.
This post was published at Zero Hedge on Nov 20, 2017.
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