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Macro Minutes: Could an Earnings Recession Derail the Recovery?

In this short Macro Minutes video, Fisher Investments’ Equities Research Analyst Larissa Murray discusses the market impact of a possible earnings recession and why it could highlight an underappreciated positive.

By Fisher Investments, 11/04/2023






Key Points

  • Equities—being forward-looking—often fall before earnings do, not necessarily after. Therefore, they can fare fine during periods of contracting earnings.
  • Predictions of an earnings recession sound like it could derail the recovery, however, we don’t think that is likely as firms beat estimates fairly often.
  • Investors’ reaction to Q4’s earnings is another sign of the “Pessimism of Disbelief,” a phenomenon foundational to bull market beginnings.