How has the expected future for the S&P 500's earnings per share changed since we last looked at them on 11 June 2011?
Back then, we attributed the stock market's volatility to the appearance that the earnings growth of the U.S. private sector, as represented by the S&P 500, was set to stall out in the second half of 2012.
Since then, the future prospects for the companies that make up the S&P 500 have dimmed. The chart shows how the expected future for the S&P 500 trailing year earnings per share has changed, as of 10 October 2011:
From late February to early June 2011, the amount of earnings per share that investors projected the companies of the S&P 500 would realize through the end of 2012 rose substantially. But since early June 2011, the expected amount of future earnings per share for the S&P 500 has fallen.
Likewise, so have stock prices, which have only just recently bottomed at 1099.23 on 3 October 2011.
Data Source
Standard and Poor. Market Attributes. S&P 500 Monthly Performance Data. S&P 500 Earnings & Estimates. [Excel Spreadsheet]. Accessed 10 October 2011.