|For some perspective on the all-important earnings environment, today's chart illustrates 'as reported' S&P 500 earnings growth (i.e. 12-month rate of change) since 1940. There are a couple of points of interest. For one, earnings growth has tended to peak in the 20 to 40% range and trough somewhere in the -10 to -20% range. At least that was the case up until this millennium. Since the dot-com crash (i.e. the 2001 - 2002 timeframe), earnings growth volatility has increased dramatically. In fact, the post-financial crisis spike to 793% is not even shown on today's chart so as to allow the rest of the data to remain visible (i.e. not flattened out). It is worth noting that this historic post-financial crisis earnings growth spike is due in large part to the fact that earnings came in so low as a result of the financial crisis. That said, earnings growth has dipped into negative territory for the first time since the financial crisis.Notes:
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