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The Surprise About Weak U.S. Profits Is How Strong They Are

  • Goldman says EBITDA is way above past economic expansion
  • S&P 500 earnings being held hostage by weakness in energy
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For all the warnings from the bears that the plunge in profits is proof that U.S. stocks have nowhere to go but down, not so fast.

Buried deep in a routine Federal Reserve report that is notable mainly for its numbers-heavy presentation is a data point that threatens to upend the notion that Corporate America is struggling to boost earnings. The Fed’s measure of income, which happens to have moved in unison with profits for Standard & Poor’s 500 Index companies 83 percent of the time since 1992, just posted its biggest quarterly increase since 2012.