Finally, another Wall Street firm has realised that next year’s corporate earnings will be lousy. Goldman Sachs is now projecting that earnings for the S&P 500 will drop to $53, down from a peak of $88 in 2006, $83 in 2007, and $55 in 2008.
David Rosenberg at Merrill Lynch has long projected that S&P 500 earnings next year might be around $50, but he’s been a voice in the wilderness. Now he has a pal.
Unfortunately, the rest of Wall Street is still living in dreamland. The consensus S&P 500 earnings estimate for next year is $83. This estimate has been cut about 25% from the peak number, which is a step in the right direction (four months ago, analysts thought Q4 earnings would be the highest ever).
Still, the estimate needs to be cut by at least another 25%. So that means Wall Street will be cutting estimates for a while yet.
(The good news: Goldman says that–contrary to common wisdom–the market often rallies in the face of this. So we’ve got that going for us.)
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.