Citi's Levkovich Sees 2019 Markets Rise on Lower Earnings Expectations

The video discusses the U.S. equity market outlook, highlighting changes in market predictions since September. Initially, a 70% signal indicated a weakening market, but recent data shows a 90% probability of a higher market in 12 months. Earnings expectations for 2019 were overly optimistic, with initial estimates of 12% growth now revised to under 9%. The video also addresses the impact of wage pressures and pricing power on company margins, suggesting that while wage growth may increase, companies are likely to maintain pricing power to protect margins.

What was the initial probability of a weakening market according to the primary sentiment metric?

• 50%

• 70%

• 90%

• 30%

What was the consensus earnings growth estimate for 2019 back in September?

• 15%

• 6%

• 9%

• 12%

Which of the following was NOT mentioned as a challenge to achieving 12% earnings growth in 2019?

• Stronger dollar

• Higher interest rates

• Increased consumer spending

• Emerging market problems

What is the expected wage growth percentage according to the lead margin indicator?

• 4%

• 3.5%

• 5%

• 2%

How are companies responding to wage pressures according to the discussion?

• Reducing workforce

• Increasing prices

• Cutting production

• Outsourcing jobs