Layoffs are piling up. Recession fixations are deepening. But as higher prices continue to stick, Wall Street expects net profit margins for the companies that make up the S&P 500 index to remain at levels much higher than any level prior to the COVID-19 pandemic.
As MarketWatch has previously reported, S&P 500 profit margins had never reached 11%. They had surpassed 10% only twice, before topping 12% in 2021, despite convulsions to the labor market and global supply chains that forced companies to pay more for employees and shipping. The higher margin forecasts could also come down to timing, and the way earlier decisions to raise prices, coupled with more recent decisions to cut costs, land on the top and bottom lines. Profits for some companies, such as jet maker Boeing Co. BA and Amazon.com Inc. AMZN — a company big enough that it could determine whether S&P 500 profits rise or fall this year altogether — are also expected to stage a big comeback this year.
See also: Investors are ‘desperate’ for a recession that forces the Fed to cut interest rates but what happens to markets if the economy remains healthy? As executives juggle those costs and a slowing economy, analyst sentiment for the first half of the year has turned sharply. “Over the past few weeks, earnings expectations for the first quarter and the second quarter of 2023 switched from year-over-year growth to year-over-year declines,” the FactSet report on Friday said. However, analysts expect a rebound in the back half of the year.
The parade of bank earnings has also continued, after higher interest rates propped up profit for JPMorgan Chase & Co. JPM , Bank of America Corp. BAC , Citigroup Inc. C and Wells Fargo & Co. WFC despite a slowdown in deal-making.
*grabs gun*
1964'D Over D' Key Date Lincoln Penny Uncirculated --- --- But it Now
The working class still suffers
That would suggest it bodes well for stock indexes, however, paired with rising interest rates,things become a little less certain.
recall me the last time that banks missed estimates whereas companies made it better
Because the Fed supports Wall Street, not main street
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