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Recession? Corporate America’s Earnings Say It’s Already Arrived

  • S&P 500 set for the longest quarterly profit drop since 2016
  • Margins, banking crisis among key themes this season
A vacant retail storefront in the Union Square shopping district of San Francisco.

A vacant retail storefront in the Union Square shopping district of San Francisco.

Photographer: Jason Henry/Bloomberg

As the US economy teeters on the brink of recession, Wall Street is already enduring what could turn out to be the most prolonged corporate profits downturn in seven years. 

With the first-quarter earnings season drawing to a close, the profits of S&P 500 companies are estimated to have dropped 3.7% on average, compared to a year ago. While data compiled by Bloomberg Intelligence shows that 78% of firms surpassed forecasts, that’s less impressive than it sounds, given analysts had slashed their expectations before the season kicked off.