Though a further drop in stocks will take more of a bite out of consumer confidence and spending, I continue to expect corporate profits to remain high, and, despite the current economic soft patch, I see little to alter my expectations, as companies successfully navigate an environment of relatively slow growth with productivity gains and a tight lid on costs. I still see S&P earnings approximating $90 a share in 2011, slightly better than 2.0% economic growth (in the second half of 2010 and for all of 2011) and steady (albeit subdued) jobs creation. U.S. stocks now sell at only 11.5 times vs. a multi-decade average of 15.3 times and at over 17 times during comparable periods of quiescent inflation and interest rates. By contrast, at 1,020, the S&P appears to be discounting slightly less than $70 a share in 2011 S&P profits, approximately 0.5% economic growth and some job losses. Stated simply, expectations for the economy and markets are now reduced and are now more reasonable.