S&P Earnings Decline

The folks at chart of the day have an interesting visual on the impact of the S&P 500's earnings decline. "For some perspective into the current earnings environment, today's chart compares S&P 500 earnings performance during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1936-2006 (dashed blue line). As today's chart illustrates, the current decline in earnings is several orders of magnitude greater than the average decline during a recession. The current decline is also more severe than what was the most severe earnings decline on record – the decline that began in 2001 (gold dashed line)."

Source: Chart of the Day. {Subscription Service. Link to their public site: https://www.chartoftheday.com/ }

My perspective: Judging by this chart we should now be at the point where we are seeing the trough in earnings decline. This may be why stocks are acting better. If this is the worst quarter for earnings than expect this rally to have legs or at least to not completely retrace the decline of last Winter.

*Long ETFs related to the S&P 500.