August reporting season is starting to fall into the sights of investors and recent retail downgrades could be a sign of things to come

August reporting season is starting to fall into the sights of investors and recent retail downgrades could be a sign of things to come. Chris Prunty, Investment Analyst at Ausbil Investment Management, says that earnings expectations for FY15 pose a short term risk for the Australian market. Prunty believes this is one of the major risks facing Australian equities investors in the short term. Given the low cash rate (and the view that a hike this year is unlikely) PE's in the mid teens don't seem unreasonable. Having said this consensus earnings expectations for next finance year look too high especially in light of recent consumer sentiment. Share prices tend to follow earning revisions so this is where I see risk.