Web Trader MT5
Two or more consecutive quarters of year-on-year decline in aggregate corporate earnings. The structure mimics a GDP recession but applies to profits, not output. The two don’t always coincide. The 2015–16 episode is the textbook case where they didn’t: US GDP kept growing, but earnings fell for five straight quarters as oil collapsed and a strong dollar punished multinationals translating foreign earnings back into USD. Earnings recessions matter because equity markets care about earnings more than GDP. A profits drag can compress multiples even while the broader economy chugs along. Example: S&P 500 earnings declined year-on-year for three quarters from late 2022 into early 2023. The economy didn’t enter recession. Equity indices wobbled and recovered. By the time anyone wrote the postmortem, the drag was already fading.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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