It’s early, so don’t break out the champagne just yet. But if the current data holds, corporate America will realize yet another quarter of strong profits.
So far, 84 of S&P 500 companies have reported aggregate sales and earnings growth of +5.4% and +11.8% year-over-year for the second quarter of 2017, as tracked by the Hedgeye Macro team. This bolsters our U.S. #GrowthAccelerating call.
Recall this trend of profits accelerating comes after five consecutive quarters of negative year-over-year profit growth from the second quarter of 2015 to the second quarter of 2016. Over that period, the U.S. economy peaked at 3.3% year-over-year growth (in 1Q15) and slid to 1.3% by the second quarter of 2016.
GDP has since rebounded to 2.1% year-over-year growth in the first quarter of 2017. We see it accelerating into early 2018. As you can see in the chart below, earnings have snapped back too.
Good news, stock market bulls. Okay, now you can break out the champagne.
