Dangerously Rosy Earnings Estimates Will Plunge Stocks When They Adjust | Lance Roberts

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Aug 9, 2025

Lance Roberts, a seasoned portfolio manager and financial analyst, dives into the alarming gap between current corporate earnings estimates and historical averages. He warns that upcoming downward revisions could lead to a significant stock market correction. The discussion also touches on the impact of AI on corporate profitability, market valuations, and potential employment shifts. Moreover, they explore geopolitical influences on markets and the media's role in shaping public perception, blending financial insights with a call for human connection and kindness.

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INSIGHT

Earnings Estimates Are Dangerously Rosy

Earnings expectations are far above historical trends and create asymmetric downside risk for markets.
Lance Roberts warns a reversion in earnings would force a meaningful market repricing.

ANECDOTE

Phone Left In Ireland, Shipped Home

Adam Taggart realized he left his phone in Ireland and could not disembark due to FAA rules.
He located the phone in the terminal, had someone pick it up, and arranged to have it shipped home.

INSIGHT

Short-Term Trend Still Intact

The S&P remains above its 20-day moving average, keeping the short-term bullish trend intact.
Lance Roberts notes weakening money flows and a minor negative momentum divergence despite the rally.

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2026 forward corporate earning estimates are the farthest they have ever been from historical averages.This makes a future downward revision a near-guarantee at this point; which will in turn force stocks to reprice downwards as well.So warns portfolio manager Lance Roberts.While he doesn't see much on the immediate radar to suggest the market is in any near-term trouble, he's concerned this lurking repricing risk will grow the more that earning estimates distort to the upside.For everything that mattered to markets this week, watch this Weekly Market Recap video.

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