Europe is also staring at a similar scenario.
According to financial data, with the outlook of Wall Street’s earnings facing a significant deterioration in recent months, the risk of the United States slipping into a recession has become a major concern.
Analysts on average expect the S&P 500’s first-quarter earnings per share to drop 0.3% year-on-year, according to I/B/E/S Refinitiv data.
This is a significant drop from 8.2% rise expected as recently as October and would mark the first contraction in U.S. company earnings in the last three years.
Analysts have also made deep cuts to forecasts for the rest of the year. However, they still expect the growth momentum to continue for the next three quarters. This means, Wall Street would avoid a technical recession which is typically defined as a fall in two consecutive quarters. This is likely to be only just since the lower growth forecasts are set to be meager.
The pace and size of the cuts have raised concerns that the downward trend will continue, especially given their load of debt and squeezed margins.
As of now, the full-year estimate stands at just 4.2%, down from 10.2% in October, 2018.
The scenario is pretty much the same for Europe as well with analysts expecting barely any growth among European companies listed on the STOXX 600, which according to data are moving at their slowest pace in 18 months.