Growth re­turns?

Daily Freeman (Kingston, NY) - - NATION+WORLD -

Cor­po­rate prof­its are back. Or are they?

Quar­terly earn­ings for the Stan­dard and Poor’s 500 in­dex have fallen for most of the past two years, even as stocks have hit fresh records. That’s odd, and many in­vestors are wor­ried.

Now word on Wall Street is the bad streak may be over.

For the fourth-quar­ter re­port­ing sea­son that be­gins next week, fi­nan­cial an­a­lysts are fore­cast­ing a 4 per­cent rise in prof­its com­pared to a year ago. That would mark the sec­ond quar­terly gain in a row, ac­cord­ing to S&P Global Mar­ket In­tel­li­gence.

Two is trend, right? Or is it three?

No wor­ries. The an­a­lysts are even more op­ti­mistic about the next four quar­ters, pre­dict­ing gains of 9 per­cent or higher for each of them.

Much of the credit goes to oil prices and in­ter­est rates.

Crude prices have dou­bled after hit­ting a 13-year low in Fe­bru­ary, help­ing oil drillers. And higher rates will al­low banks to charge more for their loans.

Of course, the nearly al­ways sunny an­a­lyst com­mu­nity isn’t the most re­li­able of fore­cast­ers. And if oil and rates can go up, they can al­ways fall again.

On sec­ond thought, bet­ter to check back after a few months be­fore declar­ing an earn­ings vic­tory.

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