Earnings recession is expected to swallow all of 2019 after holiday forecasts disappoint

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75% of earnings recessions since World War II have morphed into economic recessions, according to this strategist

Earnings in the S&P 500 index SPX, -0.04% are now projected to decline 1.51% in the fourth quarter from the year before, according to a FactSet computation of analysts’ average forecasts for individual companies.

The S&P 500 has notched 10 new all-time highs since Oct. 28, but “during that entire time, earnings forecasts have been coming down,” he noted. While third-quarter earnings did fall, the decline wasn’t as steep as what analysts had originally projected, marking the 31st straight quarter when actual profits exceeded end-of-quarter estimates.

Some of those forecasts caused huge swings. General Motors Co. GM, +1.73% was expected to post a 33.1% fourth-quarter increase as of Sept. 30, but earnings are now projected to decline nearly 89% after a workers’ strike lasted more than a month. Rival Ford Motor Co. F, +1.61% slumped to projections of a 40.2% decline from a 7% drop amid negative impacts from warranties, incentives, and its Chinese joint venture.

Crude and natural gas prices remain below where they were in the fourth quarter of 2018, which is likely to contribute to continued profit pressure for energy companies. Chemicals companies like Dow Inc. DOW, -0.15% and DuPont de Nemours Inc. DD, +0.65% dominate the materials sector and are expected to show sustained margin weakness.

 

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MoneyMapPress When Wil Tom Gentile repay my $495,00 subscription promised the end of October?

Job Market Shows Resilience, Quieting Recession Fears The economy added 128,000 jobs in October, a figure that would have been higher without the General Motors strike and other factors. US GDP rose a better-than-expected 1.9% in the third quarter as consumers continued to spend

No government in the world wants to admit that it is heading into recession! As new car sales decline, we are in a recession. That is how it always began!

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