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RealMacro
Feb 9, 2023 1:00 PM

Corporate Profit Update Short

Corporate Profits After Tax (without IVA and CCAdj)FRED

Description

For the past two decades, corporate profits have grown at a faster rate due to excessive government deficits, Zero Interest Rate Policy (ZIRP), and Quantitative Easing ( QE ).
However, this prolonged growth has not been without its hiccups. There were two major corrections, one in 2008 to 2009 which resulted in a 63% drop in corporate profits and a severe recession,
and the other from 2014 to 2016 where the S&P 500 remained relatively stagnant with a market decline of almost 20%.

We are on the brink of another correction, and markets have already started to plummet even before corporate profits start to show signs of weakness. This is a cause for significant concern.
Despite the abundance of bottom fishing being carried out by supposed "experts" on social media.

With all that being said, I must acknowledge that corporate profits have remained more resilient than I anticipated. I attribute this to effective overall management.
However, relying solely on cost-cutting measures is not a sustainable approach to prosperity.

Comment

As expected!

Comment

"Better than expected" is not better. Back in FEB I warned corporate profits would fall. Here we are in June and you can now all see the analysis was once again bang on!

Another Great Call!

Comment

US Corporate Profits Fall the Most Since Q4 2020

Corporate profits in the United States declined by 5.9 percent to USD 2.329 trillion in the first quarter of 2023

Unfortunately, the chart does not reflect it yet.

As expected!
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