Chart Of The Week: Commodity Prices Vs. Corporate Earnings

By |2016-12-01T15:44:43+00:00August 14th, 2015|Categories: Technical Perspective|Tags: , , |

Summary Commodity crashes are typically associated with severe earnings contractions. Current expectations for flat calendar-year operating results seem overly optimistic in the present environment. A cautious outlook toward second-half earnings is advised. Will collapsing commodity prices clobber U.S. earnings? In six out of seven cases since 1970, commodity crashes exceeding 20% year-over-year have corresponded with earnings contractions exceeding 10% year-over-year. The lone exception occurred in 1998 when earnings decelerated to zero growth without actually contracting. Given this [...]