Back to top

Real Time Insight

Corporate profitability has been a standout performer in this earnings cycle, with double digit growth in the last eight quarters. This earnings momentum has served as a key source of support for the stock market.

But all cycles eventually mature and turn around. This earnings cycle appears to be maturing in a backdrop of growing anxieties about the global economy. Europe is heading towards a recession and the extent of the Chinese slowdwon remains uncertain.

With about 40% of the earnings for the S&P 500 companies coming from international markets, it is doubtful that this worldwide slowdown will have no negative impact on corporate earnings.

Are the recent profit warnings from companies like DuPont (DD), Texas Instruments (TXN), Intel (INTC) and others pointing towards a materially deteriorating earnings picture? Or we can chalk all of these off to company specific issues unrelated to each other? 

 I don't think the earnings picture is materially deteriorating, but what do you guys think? Are current consensus earnings expectations adequately reflecting this worldwide slowdown?

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is a "boring" business delivering blistering growth. Another is a red-hot oil and gas producer set to surge on a drilling breakthrough. Still another, an online payment provider, ignited a 53% sales explosion during the past year.

Close This Panel X

Please login to Zacks.com or register to post a comment.