Recession Beat Grows Louder With Slower Earnings, Weaker Economy

In line with many leading indicators that the US is headed for a recession, US equities earnings are behaving in a manner reminiscent of the lead-up to prior recessions.

The main US banks will report results the following week as the earnings season picks up speed.

Recent months have seen a substantial slowdown in earnings growth as the economy adjusts to rising rates.

Global exports, earnings surprises, and the ISM all provide trustworthy leading relationships for S&P profits growth and all indicate deterioration in the months ahead.

Earnings will slow down more quickly if there is a recession. 

 Equity returns are already being negatively impacted by profit margins and P/E ratios.


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