First steps towards earnings growth

While economists debate whether the US economy will experience a mild short slowdown or a more prolonged recession, there is no debate necessary about whether US companies are in a profits recession. S&P 500 earnings growth estimates for 2001 have fallen over the past eight months from a high of 14% to 0%, with outright earnings declines anticipated in half of the S&P sectors in the next few quarters. This estimate may turn negative as we are faced with another round of negative earnings pre-announcements in March. With the economy clearly decelerating, earnings growth slowing and overwhe...