TEXT OF STORY
SCOTT JAGOW: Another earnings season begins today on Wall Street. As usual, Dow component Alcoa will turn in the first results. Sounds like Alcoa had a strong first quarter, thanks to higher aluminum prices. But for companies overall, many people think the profit party is about over. Here’s Amy Scott:
AMY SCOTT: Analysts expect members of the S&P 500 to report that their first-quarter profits grew by about 3.5 percent.
Sounds like a fine number, until you consider that the same companies have turned in double-digit growth for the last 14 consecutive quarters.
JIM PAULSEN: You just can’t grow double-digits forever. Just goes against the laws of science.
That’s market strategist Jim Paulsen with Wells Capital Management. He says a slower economy is bringing corporate profits back down to Earth.
But strategist Art Hogan with Jeffries and Company says investors shouldn’t worry.
ART HOGAN: We’re not talking about going in sort of, you know, a recession if you will. This is just earnings growth deceleration, and it’s perfectly healthy and part of a normal business cycle.
One that Wall Street may have absorbed already. Strategist Jim Paulsen says worries about corporate earnings helped trigger last quarter’s stock market turmoil.
In New York, I’m Amy Scott for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.