W3Schools

Mark Hulbert: This is one recession where stocks can actually make you money

Corporate America has a summer horror flick for you: an earnings recession.

An earnings recession is two successive quarters of earnings-per-share decline. Such a decline is projected to not only have occurred in the second quarter of 2019, but is also forecast for the third quarter.

In fact, earnings recession fears may be overblown, as the stock market historically tends to do better when earnings are declining than advancing.

That’s because an earnings recession increases the likelihood that the Federal Reserve will reduce interest rates. And, unless corporate profitability falls completely out of bed, investors love lower rates more than they hate slower earnings growth.

>>> Original Source <<<

Comentários