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Market outlook for 2016 already looking shaky

Trader on the floor of the New York Stock Exchange.
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Trader on the floor of the New York Stock Exchange.

Nicholas Colas, chief market strategist of Convergex, sounded the alarm of declining 2016 revenue growth expectations in a note to clients Tuesday morning.

Colas correctly warned that 2015 could be a weak year for stocks in November 2014 looking at this very same metric.

The 30 companies in the Dow Jones industrial average posted sales results that fell 3.5 percent year over year in the second quarter. Colas noted how expectations for the third quarter are now even worse, with analysts consensus estimates calling for a 4 percent decrease year over year.

How can the stock market climb out of this hole if the top line for companies keeps falling?

Better question for this week: How can the Federal Reserve believe the economy is strong enough to raise rates when companies are seeing falling demand for their products and services?

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