As companies prepare to report the biggest drop in earnings since the pandemic began three years ago, bulls are already looking past the decline, betting growth will resume and lift stocks to new highs.
Analysts expect first-quarter earnings to be “ugly,” with profits for S&P 500 companies falling 8%, but they also see it as the low point, Bloomberg Intelligence strategists Gina Martin Adams and Wendy Soong said. Investors who have bid up the S&P 500 by 8.0% this year are counting on a mild recession at best and an end to the Federal Reserve’s interest rate increases.
