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Is Down the Only Way to Go for US Equity Markets?

Annie Gilroy
Is Down the Only Way to Go for US Equity Markets?

Investors have been worried about the coming earnings cliff, and rightly so. Also, the S&P 500’s (SPY) net profit margin reached 12.0% in Q3 2018. The margin expanded by 1.6 percentage points year-over-year and marked a record since FactSet started recording this data in 2008. As pressure ramps up with higher raw material, energy, and labor costs and the impact of tariffs, margins are expected to come off—especially as the sugar high of the tax impact could wear off going into 2019.