You wouldn’t know it from the stock market, but we’re actually in the middle of an “earnings recession.”
It’s hard to tell this earnings season because the good news keeps piling up…
The Procter & Gamble Co. (PG) went up 4% after it raised its profit forecast.
JP Morgan & Chase Co. (JPM) hit an all-time high after it beat expectations.
Netflix Inc. (NFLX) jumped 8% after its earnings and international efforts beat estimates.
And Amazon.com Inc. (AMZN) is expected to fare well when it reports on Thursday.
Even so, we’ve had two straight quarters of declining corporate earnings – the very definition of an earnings recession. Here’s how: An economic recession for a country is defined as two consecutive quarters of declines in year-over-year (YoY) Gross Domestic Product (GDP) – the amount of goods and services a country produces.
For the S&P 500 stocks, two consecutive quarters of YoY earnings declines signal an “earnings recession”.
And this quarter looks set to be the third.
Some are calling this “bad news,” a “problem,” even a “blaring warning.”
Even so, the market doesn’t care.