Investors are beginning to turn their attention back to corporate earnings. They might not like what they see. While actual results are still coming in, we are tracking toward a 3% decline. That would mark the second-straight negative quarter — the technical definition of an earnings recession. This slowdown follows ten straight quarters of uninterrupted growth, including an extended streak of double-digit increases. By itself, this isn’t necessarily a reason to panic. Still, there are other troubling signs… Business investment has been tepid. The boom in capital spending on new equipment and factories has stalled, the stimulative effects of corporate… Read More
Investors are beginning to turn their attention back to corporate earnings. They might not like what they see. While actual results are still coming in, we are tracking toward a 3% decline. That would mark the second-straight negative quarter — the technical definition of an earnings recession. This slowdown follows ten straight quarters of uninterrupted growth, including an extended streak of double-digit increases. By itself, this isn’t necessarily a reason to panic. Still, there are other troubling signs… Business investment has been tepid. The boom in capital spending on new equipment and factories has stalled, the stimulative effects of corporate tax overhaul wearing off… Meanwhile, the damaging trade war could reignite at any time. The hostilities may even spill over into the currency markets if the White House decided to weaponize the U.S. dollar, deliberately weakening it to put domestic exporters on a more level playing field. Meanwhile, the global economy continues to cool, particularly across Europe. Even more concerning, China (the world’s economic growth engine) is seeing the weakest economic output in 30 years. The point is, any of these wild cards could trip up the market. And with the major averages having ascended to record heights, it’s a… Read More