A Preview of First-Quarter Earnings

The upcoming first-quarter earnings season will be the seventh straight quarter of falling earnings for the S&P 500. The earnings outlook has deteriorated rapidly. On October 1, Wall Street expected the S&P 500’s first-quarter earnings would rise by 25.7%. By January 1, Wall Street was looking for a decline of 12.5%. Now analysts expect a decline of 34.1%.

The bright spot is that this should be the last quarter of lower earnings. Despite these poor first-quarter earnings, a few companies will issue positive earnings guidance for the upcoming quarters. If the economy does pick up, then it will be very likely that the March 9 low represented the ultimate low for the S&P 500.

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