Worries are rising about inflated profit expectations on Wall Street
Corporate profits may have already hit bottom: After falling for much of the last year, S&P 500 companies are expected to report 0.2% profit growth for the summer
By STAN CHOE
Published - Sep 21, 2023, 08:12 AM ET
Last Updated - Sep 21, 2023, 08:12 AM EDT
NEW YORK (AP) — Corporate profits may have already hit bottom: After falling for much of the last year, S&P 500 companies are expected to report 0.2% profit growth for the summer.
While that sounds anemic, it would be the first quarter of growth in a year, according to FactSet.
For three straight quarters, profits have fallen from year-ago levels due to pressure from higher costs and a fragile global economy. Hopes for a return to growth are crucial for the stock market to extend this year's rally.
“Now, the bull case is shifting to one premised on reaccelerated earnings,” says Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, of the narrative driving the market.
