Biden win could cost stocks $20 per share, so another market collapse

Sure, just like Obama raised taxes and killed the economy. Remember, the Democrats controlled all three branches of government in 2009-2010. Obama even ran on repealing the Bush tax cuts. Once he got in office, during the midst of the Great Recession, he didn't have the guts to raise taxes. In fact, in 2010 Obama signed off on a bill to extend the Bush tax cuts. Again, on New Years Eve 2012, Obama signed a partial extension on the Bush tax cuts. Obama even cut FICA taxes during the Great Depression. He ran again in 2012 on raising taxes and the best he could do was to restore the highest tax rate to 39.6%.

So, no, Biden won't raise taxes, at least not as long as we are in the economic mess we are in currently. I will even stipulate that he wants to raise taxes but a bill raising taxes will never clear Congress.

 

The S&P 500 earnings estimate by Goldman Sachs is a decrease of $20 in earnings per share(EPS).

However, JPMorgan Chase estimates, "“The consensus view is that a Democrat victory in November will be a negative for equities. However, we see this outcome as neutral to slightly positive,” JPMorgan strategists led by Dubravko Lakos-Bujas wrote in a note to clients Monday."

 

Yes, it is. The quote you shared says, "would slash its S&P 500 earnings estimate".

 

Prediction makes no sense because stock prices vary greatly. It's stupid to use a dollar per share statistic to describe how much the market might drop.

Furthermore, the metric being discussed is overall S&P 500 earnings estimates and then that number is distorted into a dollar per share metric. It's just plain sloppy.

But that's The Gateway Pundit reporting.

If you use a percentage method they seem to be saying the S&P earnings estimate would drop from $170 to $150. That is a decline of 11.8%. But that is not the same as the S&P index dropping 11.8%.

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Yes, it is. Have you ever read a prospectus for a mutual fund? I have. Also, spent 38.5 years as an accountant.

 

It's a bit more involved than that. It's the sum of median EPS estimates of all 500 companies in the S&P index.

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Bingo!

 

That's what I wrote.

 

Well, you think that because that is how The GatewayPundit distorts it when they reported it. And you couldn't be more wrong.

Both of your statements are laughingly incorrect. I mean laughing until crying.



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Let me help you out:

"Calculating the earnings per share for the index is a bit more complicated than the PE. It follows the same approach used to calculate the index itself: the market value of each of the 500 companies is added together giving a total is about $15 trillion today. Then to have a more manageable number for the index level, the $15 trillion is divided by a scale factor called the divisor. One can think of the divisor as if it were the number of shares outstanding of a company: a company’s stock price is its total market value divided by the number of shares. Likewise, a company’s EPS is its total earnings divided by the number of shares. The analogy is that the EPS for the S&P 500 is total earnings of the 500 companies, divided by the same divisor used to calculate the index."

Inside the S&P 500: PE and Earnings Per Share | S&P Dow Jones Indices.

Your welcome!

 

This visualization from 4th quarter 1988 to 4th quarter 2013 might also be of assistance to you:

 

This will get you the number you are seeking but there might be an easier way to visualize it.

Let's say:
Amazon earns $9.00 per share
American Airlines earns -$0.50 per share
Anheuser-Busch earns -$1.00 per share
Boeing earns -$1.50 per share
Ford earns $1.00 per share

In this example of five companies the EPS estimate is $7.00.

Now repeat this exercise for all 500 companies in the S&P500. The article is saying after totaling up all 500 companies the end number would be $170. But if Biden were elected it would be $150.

 

Yes, it is EPS, not stock price.

 

I gave up trying to figure out the stock market about 7 years ago. I turned my investments over to a financial advisor who understood my risk profile - willing to give up some potential gains in order to mitigate some potential losses.