No, the "moment of truth" in the title has nothing to do with the preliminary trade deal announced by Trump last Friday. I have been showing concerns for some time about the market`s valuation. Based on Friday`s close, the market was trading at a forward P/E ratio of 16.9, which is above its 5-year average of 16.6 and 10-year average of 14.9.
If stock prices were to advance from current levels, the E in the P/E ratio has to improve. Earnings Season starts in earnest this week as the big banks begin reporting tomorrow. That's the "moment of truth" for stock prices.
The full post can be found
here.
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