The air underneath stock prices is indeed getting very thin at these altitudes. According to none other than Goldman Sachs, median stock prices are positioned at the 97^th percentile of historic valuations. Other metrics such as Median PE ratios, Market Price to Sales and Total Market Cap relative to GDP all validate the extremely overvalued condition of U.S. stocks.

In order to justify these near-record valuations, analysts are once again predicting a J-curve in earnings growth for next year. S&P 500 earnings are projected to rebound from the trailing twelve months earnings per share (EPS) of $111, to about $130 for the forward 12 months EPS.    

The S&P 500 has produced five consecutive quarters of negative earnings growth. According to FactSet, earnings growth for the index so far in the third quarter of 2016 has a blended increase of just 1.6%. And even if earnings manage to produce a small single digit rise in year-over-year earnings growth for the first time in the past one and one half years, it would hardly support near record market valuations.

Since 2010, economic growth in the United States has been slightly above 2%, and for the first three quarters of this year GDP growth has averaged just 1.7%. Yet despite this anemic economic growth and shaky earnings backdrop, perma-bulls are still betting on a huge earnings surge next year of 16% in order to reach that illusory target of $130 EPS.

But the news coming out of multinational conglomerates so far this quarter proves EPS won’t even come close to that Wall Street earnings fantasy.

Right out of the earnings gate light weigh metals giant Alcoa blamed, “near-term challenges in some markets” for missing its earnings estimate, as its revenue declined 6% year-over-year.

General Electric (GE) lowered its revenue growth and narrowed its profit forecast for the year. The multi-national industrial giant noted its revenue rose less than expected, to just 1 percent in the quarter. The company also trimmed its full-year revenue forecast, now expecting revenue to be flat to 2 percent growth.