S&P 500 Perfect Earnings Record Is on the Line With Peak Growth
- Robust second quarter likely marks the top of expansion cycle
- History shows waning earning momentum precedes subpar returns
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All through the pandemic era, buying stocks when corporate America delivers its quarterly reporting card has been a reliable winning trade. But the streak may be coming to a close.
While second-quarter profits may look robust when banks start reporting on July 13, the forecast earnings increase of 64% for all firms in the S&P 500 Index probably marks the pinnacle of this expansion cycle. That’s adding to concerns that everything that has bolstered this 15-month bull market, from an economic boom to massive policy support, is poised to lose steam.