Bullish on earnings?
Call it human nature, but it is fascinating to see how everyone loves to strip financials out of the earnings pie to declare that the rest of the profit picture is running at +7.4% YoY; not nearly as scary as the -17.2% overall trend. But nobody ever stripped out financials during the 2003-06 boom. And nobody seems willing to strip energy sector earnings out of the 1Q profit results – on
score, earnings have plunged 24%. Maybe the best way to portray the situation is to look at corporate earnings without the two bookends – financials and energy – and what we get is a +3% earnings growth rate. Not bullish; not bearish.
- ML Research, David Rosenberg
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