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.