August 1, 2021
Markets

Why investors are worried about a profits squeeze in 2022

I T IS MID-JULY, so the football season in England will start soon. You probably hadn’t noticed it had ended. The earnings season, when listed companies in America reveal their quarterly results, comes round with similarly tedious frequency and also never seems to stop. The second-quarter season that kicks off this week ought to stand out, though. Public companies in aggregate are expected to reveal the largest increase in profits since the bounce-back from the Great Recession of 2008-09.

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Optimism about earnings has driven share prices higher in the past year. But financial markets are relentlessly forward-looking. And with bumper earnings already in the bag, they now have less to look forward to. A rally in bond prices since March and a sell-off in some…

Read full article here: www.economist.com