You know the meme: the corporate sector is healthy the world over, and the only reason there is no investment anywhere in sight on foot of the wonderfully robust earnings is that... err... political uncertainty around the U.S. elections. Because, of course, political uncertainty is everything...
Except when you look at EPS.
Now, what is the above chart showing?
- EPS is down in the politically "uncertain" U.S.
- EPS is even more down in the politically less "uncertain" Europe (though you can read on that subject here).
- EPS has been falling off the cliff since the "political uncertainty" (apparently) set in 4Q 2012 in the U.S. One guess is the markets expected, correctly, the epic battle between The Joker and the Corporate Godzilla back then. And in Europe, since mid-2013, apparently, the markets had foresight of who knows what back then.
But never mind, there is no secular stagnation anywhere, because earnings are, apparently very very healthy, very robust, very encouraging. All of which means just one thing: the markets are not overpriced or overbought. Pass de Kool-Aid, lads!