Earnings are plummeting. US equity markets to follow? From Jesse Felder at davidstockmanscontracorner.com:
It’s earnings season once again and it looks as if, as a group, corporate America still can’t find the end of its earnings decline since profits peaked over a year ago. What’s more analysts, renowned for their Pollyannish expectations, can’t seem to find it, either.
So I thought it might be interesting to look at what the stock market has done in the past during earnings recessions comparable to the current one. And it’s pretty eye-opening. Over the past half-century, we have never seen a decline in earnings of this magnitude without at least a 20% fall in stock prices, a hurdle many use to define a bear market.
In other words, buying the new highs in the S&P 500 today means you believe “this time is different.” It could turn out that way but history shows that sort of thinking to be very dangerous to your financial wellbeing.
Over the past 50 years, has there ever been this much central bank monetary easing and policy? I didn’t think so….. So isn’t it different this time? I would say so, no crash in the future, only an upside down crash. The next crisis is and will be hyperinflation. There will never be another crash, and that is a worse financial crisis than a crash could ever create.