Happened yet? Just wait for the '07 numbers
During the bull market of the mid- to late '90s, average earnings for the S&P 500 rose more than 12% a year. When companies began warning of slowing profit growth in 2000, stocks started to nosedive.
Now for the current bull. From 2003 to 2006, the S&P's annual earnings rose more than 17%, on average. But the consensus estimate of the market strategists tracked by Thomson Financial is that earnings will grow by only 7% in 2007 - a huge change.
It's not hard to see why. Productivity growth is down. Wage pressures are rising. And remember those soaring energy prices we just talked about? On top of all that, long-term rates in the first half of the year were sneaking up. If that trend resumes, it will discourage companies from borrowing in order to make big investments.
"If liquidity should dry up," says John Fox, co-manager of the FAM Value fund, "that would be a negative."
Translation: It could make this bull look like hamburger.