Caution from JP Morgan on EPS downgrades resuming again....not what you want to hear at this time of year.

"Global Sell-Side analysts start to downgrade their forecasts, again. Global sell-side analysts have started downgrading their 1-month & 3-month earnings forecasts (-1.3% from +3.0%), signaling a potential return of volatility and increased downside risks in global equity markets. While equity sentiment remains bullish and indices are near summer highs, the brief period of net EPS upgrades has stalled across all regions. Regionally, Japan and the USA still see net EPS upgrades, but Asia Pacific ex Japan, Europe, GEM (Global Emerging Markets), and the World are experiencing net downgrades, with Europe showing the most significant deterioration. This trend suggests a challenging environment for equity prices, particularly in Europe, where the change in EPS revisions is poor across nearly all countries, increasing the likelihood of falling equity prices, and a more aggressive defensive sector rotation."