typically, in a recession earnings drop 20%+, while S&P500 Index still prices in $230 of earnings.
This time around despite the inflation (and, hopeful thinking), earnings might drop even more:
1) US corporate margins are SO high – multi decade highs
2) undoing the unusually favorable Macro conditions of the last 20-30 years, we would have high inflation, super strong USD and higher rates eating into margins beyond the typical cyclical punch
3) you have to estimate the drop in earnings from the previous peak of $200 (2021) not from the illusive $230 for 2022 that ppl still anchor themselves to