Earnings momentum peak may be soon

The economic environment improved steadily throughout 2009.

While economic data has continued to improve, the rate of change has slowed somewhat. Despite declining economic momentum, earnings momentum remains strong and the majority of companies continue to deliver results that exceed expectations. However, we would expect earnings momentum to peak early in 2010, creating a further headwind for the market. The combination of decelerating economic and earnings improvement, while clearly not helpful, does not necessarily preclude the market from moving higher. Indeed, it is a part of the natural evolution of a recovery. The rebound in the market fr...