I will say flat out that I didnít think December would be a down month, and yet it is shaping up to be the worst December since 1931, possibly ever when the month is over.

Needless to say, the economic environment today is very different than during the Great Depression, so parallels are difficult to draw, despite the similarity of the stock marketís performance. Based on the latest consensus estimates from FactSet, growth in earnings per share for the S&P 500 SPX, +4.96% is going to be 20.6% in 2018 with another 7.9% in 2019, along with 5.3% revenue growth.

I do not believe this financial panic is only about the expected slowdown in the economy and earnings.

It is true that the stock market is forward-looking and that both EPS and GDP growth are expected to slow in 2019. A good example of what happens in a slowdown of EPS and GDP growth is the 2014-2016 stock-market environment, where we had several quarters with negative EPS growth (see chart). The stock market went into a trading range but retested the highs of that trading range multiple times before it ďbroke outĒ.



Opinion: No bear market for stocks in 2019 because economy, earnings will keep expanding