First-quarter earnings by companies in the S&P 500 Index declined by 14 percent year-over-year, making it the worst quarter for earnings since the global financial crisis, reported FS Investments. And the second quarter is expected to be even worse.
Additionally, a record number of companies withdrew earnings guidance, reinforcing the sense that investors are flying blind, according to FS Investments. Markets have not yet priced in a large decline in future years’ earnings as they had by the peak of the global financial crisis. This opens stocks up to further potential volatility.
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