Don’t look at corporate earnings for clues on how the economy is doing

Sabri Ben-Achour Apr 30, 2019
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Board members watch a video demonstration for the Surface Hub 2 during the Microsoft annual shareholders meeting in Bellevue, Washington, in 2018. Stephen Brashear/Getty Images

Don’t look at corporate earnings for clues on how the economy is doing

Sabri Ben-Achour Apr 30, 2019
Board members watch a video demonstration for the Surface Hub 2 during the Microsoft annual shareholders meeting in Bellevue, Washington, in 2018. Stephen Brashear/Getty Images
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As some economic indicators have become fairly predictable — with a historically low unemployment rate and inflation that’s also pretty low — some may be tempted to look at corporate earnings for clues on how the economy is doing. Major corporations like GM, Apple, Facebook, Alphabet and even McDonald’s issue quarterly earnings reports that offer a glimpse into how they are doing. And those reports have a lot of sway over markets. But it’s important to think that what’s good (or bad) for corporations may not be good for the economy overall.

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