Next Up: The Forgotten Earnings Season


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Only once before have U.S. earnings expectations risen so far, or so fast, as they have this year. Yet, investors couldn’t care less as shares are down. The result is that Wall Street’s favorite valuation measure has fallen at a speed usually only seen in a crisis.

That doesn’t mean stocks are a screaming bargain. But the 12-month forward price/earnings ratio on the S&P 500 has fallen from a 16-year high of 18.6 times adjusted earnings at the end of January to 16.4 times at Tuesday’s close, putting it back to where it…

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