Another corporate earnings season is upon investors, and it is a season of recession.
Corporate profits in the first quarter will be smaller than they were a year ago. It will mark the second consecutive quarter that company bottom lines have declined from a year earlier. If one were to apply the most common accepted definition of an economic recession — two straight quarters of contracting economic activity — then corporate earnings are in a recession.
Earnings by S&P 500 companies are forecast to shrink by 6.8 percent as firms begin reporting financial results in bulk during the week ahead. That would be the deepest drop since the second quarter of 2020. (Remember that quarter? COVID-19 was spreading, stay-at-home orders and fear gripped the economy and sent corporate profits into an immediate tailspin.)
