Stock Market Analysts Keep Downgrading 2019 Earnings Estimates. Ultimately stock prices are driven by earnings. Stock analysts have been downgrading 2019 estimates on company operating earnings (see the charts below). As a result, a clear warning that the markets this year will become increasingly treacherous.
But why hasn’t the market done worse? In fact, there has been a growing consensus that recent market support and surges have been propelled not so much by investors, but rather by companies buying back their own stock. Earnings decreases and slowing growth also mean companies should become increasingly unwilling to tap excess cash or use debt to execute buybacks. This means even more trouble ahead for the stock market.