Alec Young, equity market strategist for Standard & Poor’s, told CNBC’s “Squawk Box” that he expects many companies to beat lowered first quarter earnings expectations, but that won’t drive the market higher.
“The market is trading around 15 times (earnings),” Young said Tuesday. “If you beat and come in at 6%, that’s not great for a 15 multiple. It may help the market stay where it is, but to get P/E expansion, I think you need earnings growth closer to double digits.”
Young looks for 7% earnings growth in the S&P 500 this year and 11% in 2008. He doesn’t expect a Fed rate cut to lift the market.