Report Detail Summary

Earniongs Recession ?

July 22, 2019

Nearly four-fifths of S&P 500 firms that issued guidance on financial performance for the latest quarter indicated that earnings per share will fall year on year. The guidance has started an important conversation regarding the stock market outlook. Some market participants worry that the guidance, 4th quarter and the likely earnings decline during the second quarter may be signaling a bearish profit outlook. These people worry that the earnings decline is an inflection point signaling the end of the economic expansion that began as the US economy rebounded from the recession associated with the financial crisis. Others offer a simple and bullish explanation for the downturn. They attribute the year over year decline in earnings to the implementation of the Trump tax rate cuts. They also argue that once implemented, the Trump tax rate cuts and deregulation polices have increased incentives to work save and produce that will continued to decline, corporate profits have surged doubling over a decade ago, the unemployment continued to decline to record lows, wages began to rise without any sign of any inflationary pressures.

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The ValueTiming™ strategy is based on the assumption that politicians and policymakers have particular views of the world, and that they will in general adopt policy measures that are consistent with these views.


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