Corporate Earnings Record First-Quarter EPS Growth

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We think the market’s pessimism is overdone. It is clear to us that last year’s surge in earnings, right after the most significant tax cut in modern history, were not a high bar but the beginning of a new trend. According to Thompson Reuter’s Refinitiv, first-quarter 2019 earnings beat the prior year’s record by 1.4%. Certainly not remarkable growth but positive nonetheless. To paraphrase Mark Twain, reports of the death of increasing earnings are greatly exaggerated. This may have been self-evident once we observed the extraordinary first-quarter GDP print at 3.2%. It seems as though a government shutdown, a China–U.S. trade dispute and a market rout in the prior quarter was simply a “storm before the calm.”

Please review our 2019 Global Perspectives Forecast: The Storm before the Calm

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