Big divergence between the S&P 500 price and earnings

The S&P’s earnings (see bar graph below) have been dropping for two straight years. Yet the price has increased by 18% during that same period. I think this is the fault of the Federal Reserve. Their pronouncements of a strong-enough economy to allow them to raise rates is accepted as gospel. So, stock prices rise. People rely on the Fed despite their long record of failure. Four separate bouts of QE did nothing to improve the economy leading them to give up on this method. Recently, they have started to “raise rates”. But this has not increased the interest rates of the 5-year note, 10-year note or 30-year bond: they are all where they were in early January.

My stock sector table shows a divergence between the Technical Group that gained and the Cyclicals Group that fell; these groups mostly move in tandem. The Cyclicals group was weighed down by big losses in the Basic Materials (e.g., mining stocks), Transportation and Energy sectors. The biggest loser, however, was the Financial Group. Here is the graph of the Bank Sector:

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