What will help the bulls get back on their feet? Yardeni Research knows

Ed Yardeni of Yardeni Research says he’s starting to worry that a relief rally is going to be more challenging to muster today than in the previous time, “when central banks had more ammo and more credibility.”

Although the U.S. economy can hold its head high, it cannot lift the global one, he says.

“If the market’s main concern is the slowdown in global growth, there’s not much reason to expect any upside surprise soon,” he adds.

• What will help the bulls to regain ground then?“Good companies that can continue to find good growth in a world of secular stagnation,” he says.
  
• What’s to be upbeat about? Commodity users who benefit from weak commodity producers, and valuation multiples that are more appealing now than before. However, earnings have to keep rising and U.S. consumers have to keep consuming for the secular bull to scrape through this latest challenge, he explains.

BTIG’s Dan Greenhaus agrees.

He says if equities are going to stage a rally from these lower levels, firm are going to have to reiterate U.S. health - not only earnings, but what corporates say will be key for the market.

Greenhaus shrugged off talk of an “earnings/profit recession”, though. Upcoming results are likely to show a 4% to 6% fall in earnings and 3% to 4% drop in revenue, he said.

Meanwhile, if you strip out energy and account for the dollar, earnings will rise 2% to 3%.