David Rosenberg: Two myths about the looming profit recession

Don't panic, the so-called earnings recession won't be as bad as you think, says Gluskin-Sheff's chief economist David Rosenberg.

Analysts are calling the very first so-called “earnings recession” since 2009, predicting that S&P 500 earnings will fall annually 2% in Q1, 3% in Q2 and 0.6% in Q3.

Not so fast, says Gluskin-Sheff chief economist David Rosenberg.

While the numbers looks like a “profit recession strictly defined’, says Rosenberg in the morning note, the real culprit may be the energy sector, which is expected to plunge 64% in Q1 67% in Q2, 61% in Q3 and 41% in Q4.

“Strip out energy, however, and you can see why investors are not exactly fussed – this is actually a one-trick pony. ”

Rosenberg said earnings outside energy are expected to actually grow 6.2 percent in Q1, 5.2 per cent in Q2, 6.7 percent in Q3 and 9 percent by Q4.

Related

Tags: ,,,,

Leave A Reply

Your email address will not be published.