Conrad de Aenlle’s Funds For Thought: Why this U.S. market rally gives investors good reason to be cautious

Many factors suggest that the U.S. stock market currently is vulnerable to a decline, maybe a big one. The fundamentals are bleak, for starters.

The U.S. economy grew at a dismal 1.2% annual pace in the second quarter, a Commerce Department report released at the end of July showed, and corporate earnings are flat at best. Analysts’ estimates of earnings for the companies in the S&P 500 SPX, +0.47% have declined in each of the last six quarters, according to FactSet Research.

It’s not as if stocks are cheap and can withstand a slowdown in economic growth or business conditions, either.

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