Quarterly US Corporate Pre-tax Earnings (US$bn) and S&P 500: 1Q’80 – 1Q’15

Notice how the BEA earnings cycle (darker arrows) 
has a strong tendency to turn before the stock market 
– both to the upside and to the downside;

The bad news is that the earnings cycle has just turned negative, 
as indicated by the red circle. 

And this could have important implications 
for the stock market and the economy over the coming quarters.

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