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A real profits recession may be on its way – but there's no need to panic

Discussion in 'Market News' started by Lily, Apr 14, 2016.

  1. Lily

    Lily Forum Member

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    The ‘new normal’ is likely to see slow corporate earnings growth. But that doesn’t mean we’re in for another major recession

    This time, it’s real. The corporate earnings recession, that is. For the better part of six months now, markets pundits have been muttering away about a lack of growth in corporate profits. Without that, the classic theory goes, you just can’t have other good things, like economic growth, job growth and stock market growth.

    The problem – until now – is that most of those analysts have been looking at the corporate earnings picture too broadly. That’s why the economy has kept growing (however anemically) and employers have continued to add jobs (just not at the impressive pace that we all might like to see), and why the stock market has at times been able to shrug off its malaise and trade in positive territory this year, leaving stocks at relatively high valuations.

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