Michael Shulman

Thursday Outlook: Commodities, Emerging Markets

You can draw all the charts you want -- markets regress to the mean, over time, based on fundamentals. Always. S+P earnings this year will be between $35-$50, the high end of the range and giving the current market a multiple of 16 plus. Multiples in non growth markets are closer to ten, in steep recessions below that number. Just do your third grade math -- and forget the noise about the S+P dividend yield being above T Bill yield as a mitigating factor. These dividends are coming down and the real comparison is corporate yields -- and the dividend yield right now is less than half the yield of corporate bonds.