Moneymoney

Mon Jul 22, 2019, 01:40 PM

Could a Second Straight Quarter of Falling Earnings Signal a Possible Recession?

Paul Davidson, USA TODAY Published 4:31 a.m. ET July 22, 2019

Sluggish corporate earnings could be another warning sign for the economy.

Two weeks ago, stocks were hitting record highs daily, juiced by expectations for a steroid-like boost to the market in the form of a Federal Reserve interest rate cut later this month.

Last week the market stalled, mostly because of mixed quarterly results from corporations and speculation that the Fed may not trim rates as much as anticipated. The stock market gave back the prior week’s gains as investors digested the reality that the market’s fundamental pillar – earnings growth – has been lackluster and may soon signal a possible recession down the road.

The Standard & Poor’s 500 index is still only about 1% below its record close of 3,014, and the Dow Jones industrial average remains above the 27,000 milestone it crossed July 11.

Yet with second-quarter earnings season underway, analysts are nervously waiting to see if the final results will deliver a second straight quarterly drop in corporate profits. Those surveyed by FactSet reckon the earnings of S&P 500 companies declined 1.9% in the April-June period from a year earlier. That’s based on a blend of their pre-earnings season estimate and actual results of the 16% of companies reporting so far.

Why the concern over back-to-back declines?

Two consecutive quarterly decreases would represent an earnings recession, which typically – but not always – foreshadows an economic recession within a year or two. Companies whose profits are squeezed tend to pull back hiring and investment.

more...

https://www.usatoday.com/story/money/2019/07/22/recession-would-another-fall-earnings-signal-downturn-2020/1774493001/

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Reply Could a Second Straight Quarter of Falling Earnings Signal a Possible Recession? (Original post)
RCW2014 Jul 2019 OP
foia Jul 2019 #1
RCW2014 Jul 2019 #3
foia Jul 2019 #4
RCW2014 Jul 2019 #5
Paradigm Jul 2019 #2
TheShoe Jul 2019 #7
uncledad Jul 2019 #6
BigKahunna2.0 Jul 2019 #8
uncledad Jul 2019 #9

Response to RCW2014 (Original post)

Mon Jul 22, 2019, 03:18 PM

1. Pick any time and somebody will be predicting a pending recession

Here's one you posted in August of 2017

https://www.discussionist.com/10208670

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Response to foia (Reply #1)

Mon Jul 22, 2019, 03:40 PM

3. And I'll most likely post one come August 2020, too!

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Response to RCW2014 (Reply #3)

Mon Jul 22, 2019, 03:47 PM

4. If you predict one every month then eventually you'll be right.

And a broken clock is right twice a day.

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Response to foia (Reply #4)

Mon Jul 22, 2019, 04:06 PM

5. Just like a "armaggedonite" then, eh? "One of these days". Bet I'll be right before they are...

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Response to RCW2014 (Original post)

Mon Jul 22, 2019, 03:25 PM

2. USA Today. Lol

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Response to Paradigm (Reply #2)

Mon Jul 22, 2019, 08:22 PM

7. Paradigm. LOL

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Response to RCW2014 (Original post)

Mon Jul 22, 2019, 04:57 PM

6. It won't be a shock when the recession does show up...

It's not been an "if" but a "when" from most of the reporting and opinions among the financial eggheads.

The difference between what is being viewed as bullish for the stock market is dependent on easy money policy.

There were $billions pumped in by the FED's bailout, and $billions more with stock buybacks, huge tax cut too.

New highs while the base of the economy slows and bond yields diving as stocks soar, seen that before...

The question is will this be a stock correction that the market absorbs, or a down turn on main street?

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Response to uncledad (Reply #6)

Fri Jul 26, 2019, 11:04 PM

8. You always offer straight forward, unbiassed analysis and unlike other posters here ......

you don't seem to have an ax to grind and grind and grind.

Very impressive... thank you

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Response to BigKahunna2.0 (Reply #8)

Sat Jul 27, 2019, 08:06 AM

9. And thank you too...

Money makes the world go around, I hate to see anybody get caught unaware of a possible downturn.

The ounce of prevention is better than the pound of cure...

Thrive!

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