http://www.bloomberg.com/news/2014-08-17/bull-market-waning-as-barclays-sees-1-gain-for-s-p-500.html
Five years of profit growth exceeding 17 percent is poised to slow in the Standard & Poor’s 500 Index, reducing returns as the bull market ages, according to Leuthold Group LLC and Barclays Plc.
Equity price gains approaching 25 percent annually will weaken to 3 percent over the next decade as profit expansion reverts to its rate since 1929, said Doug Ramsey, the chief investment officer at Leuthold. Jonathan Glionna of Barclays says overseas markets are generating too little demand to push the S&P 500 up more than 1 percent in the rest of 2014.
While neither Ramsey nor Glionna see the bull market ending, measures of sentiment are turning lower amid an advance that has gone virtually uninterrupted for more than two years. Investors are buying more hedges than any time since 2008 following a rally that has added $15 trillion to equity values.
“Temper expectations over the next several years,” Ramsey, who oversees about $1.7 billion at Leuthold in Minneapolis, said in a phone interview on Aug. 13. “It’s dangerous to assume that we’re going to have above-average earnings growth from current levels. Earnings are not depressed like where they were in 2009.”
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