Wall Street Is Split on Profits: Does an ‘Earnings Recession’ Loom?
- Analyst estimates show risk of two quarters of falling profits
- Question is, will weakening fundamentals derail bull market?
Pedestrians exit the Wall Street subway station in New York.
Photographer: John Taggart/BloombergThis article is for subscribers only.
The debate over the trajectory for corporate profits reached a crescendo this week, with two widely followed Wall Street strategists clashing over whether an earnings recession is imminent.
Just days after Morgan Stanley’s Mike Wilson announced the S&P 500 profits would turn negative for the first six months of 2019, Brian Belski at BMO Capital Markets said such fears are “overblown.” At the argument’s core is the strength of an earnings machine that’s been underpinning the record 10-year bull market.