Are we in an earnings recession? That's the name given by analysts at Bank of America Merrill Lynch to the state of corporate earnings in America. They figure that S&P 500 earnings are set to fall on a year-over-year basis in 2015. If that happens, it would be the first year of negative earnings growth since 2009.
The Thomson Reuters–tracked consensus currently expects a 2.8 percent year-over-year decline in S&P 500 earnings for first quarter 2015, compared with the 7 percent earnings gain in the fourth quarter of 2014. B of A has trimmed its earnings per share expectations for the S&P 500 to $117.50 from $119.50.
Why are earnings dropping? The two culprits are the 50 percent drop in crude oil prices and the 20 percent rise in the value of the dollar since last June. Aside from those two factors, B of A estimates that earnings growth would be around 10 percent this year.
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