David Rosenberg of Rosenberg Research warns that the ongoing earnings recession persists and shows no signs of coming to an end

by | Aug 12, 2023 | Recession News | 23 comments

David Rosenberg of Rosenberg Research warns that the ongoing earnings recession persists and shows no signs of coming to an end




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We’re in an earnings recession, and it’s not over yet: Rosenberg Research’s David Rosenberg

The global economy has been going through a series of ups and downs lately, with the ongoing trade war, geopolitical tensions, and uncertainties surrounding Brexit. And now, it seems that these factors are finally taking a toll on corporate earnings.

According to David Rosenberg, the chief economist and strategist at Rosenberg Research, the world is currently in an earnings recession. This term refers to a period in which corporate earnings consistently decline over several consecutive quarters. And unfortunately, Rosenberg believes that this earnings recession is far from over.

One might wonder why corporate earnings are declining in the first place. The answer lies in the fact that companies are facing numerous headwinds that are impacting their profitability. For instance, the trade war between the United States and China has disrupted global supply chains and has increased costs for many companies. This has led to lower profitability and a decrease in earnings.

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Furthermore, geopolitical tensions have also played a significant role in this earnings recession. Uncertainties surrounding Brexit and political unrest in various parts of the world have created an environment of caution, with businesses hesitant to make long-term investment decisions. This has further dampened corporate earnings as companies focus on cost-cutting measures rather than expansion.

Rosenberg believes that this earnings recession will persist, and possibly worsen, in the coming months. He points out that in addition to the aforementioned factors, companies are also facing rising labor costs and a slowdown in global economic growth. These factors, combined with the uncertainties already mentioned, make it unlikely for corporate earnings to rebound anytime soon.

So, what does this mean for investors and the economy as a whole? Well, an earnings recession can have wide-ranging implications. In the short term, it can lead to stock market volatility as investors adjust their expectations and re-evaluate the value of companies. This can create opportunities for traders but can also be a cause for concern among long-term investors.

Furthermore, a decline in corporate earnings can have a spillover effect on the broader economy. Lower profitability can lead to job cuts, reduced investments, and less spending by corporations. This, in turn, can impact consumer confidence and overall economic growth.

However, it is important to note that an earnings recession is not a definitive indicator of an impending economic downturn. It could just be a temporary period of adjustment, as companies navigate through various challenges. Additionally, long-term investors should keep in mind that stock market performance and corporate earnings do not always move in tandem.

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In conclusion, we are currently experiencing an earnings recession, according to Rosenberg Research’s David Rosenberg. The combination of trade tensions, geopolitical uncertainties, rising labor costs, and a slowdown in global economic growth has put corporate profitability under pressure. While this is concerning for investors, it does not necessarily mean that an economic downturn is imminent. Nonetheless, it is crucial to closely monitor corporate earnings and their implications for the broader economy.

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23 Comments

  1. bob fletch

    Recession is most likely the result of an external factor. For the first time in decades, the United States is losing its clout as a federal reserve currency. They don't have any more economies to use to control inflation, and less money is being spent on stock and oil trading than in the past. They all lend support to the idea that a new multilateral world order is in the works.

  2. Robert Pritchard

    It would have been here already if they didn't pop so many trillions of dollars into the system

  3. Erik Kurilla

    A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time.

  4. Lawrence Raine

    I am new to the stock market. Every stock that I bought so far, I was out of luck because I bought them when they were expensive. I feel I missed out on all the stock opportunities so far for the tech stocks.I believe having 175K yearly income would be a good investment so I want to plug all my savings into the stock market. I know this sounds a bit dull but I would like to know if I should learn investing or let somebody else (more capable like a FA) do it for me? Please share your thoughts. I am kind of tired of searching for a good stock to buy and losing all the good opportunities.

  5. Clara Lynn

    I used to think every investor lose out during recession, meanwhile some make millions. I also thought everybody went out of business during the Great Depression, but some went into business. Bottom line, there's always depression for some, and profit for others, it all starts from having the right mindset. That said, I've set asides $250k to invest for future, unfortunately I'm a complete noob.

  6. Matt Jones

    Best analogy yet, "Recessions are like an odorless gas"…..which in laymen's terms means by the time you realize what the hell is going on it's too dman late.

  7. Alfred Smith

    Recessions are where millionaires are created. I feel for the older generation, but you should do everything possible to double and triple your investments if you are young or middle age.

  8. Ask Why

    The Fake Beats are misinformation.

  9. John Mininger

    I don't pay a whole lot of attention to whether they beat estimates; pay a whole lot more attention to how their results compare YoY or even prior quarters.

  10. EJ

    Good head on his shoulders, forward looker

  11. WaterTraveler

    this guy aint said anything positive since 2008

  12. nathan500100

    15 months from first rate hike so dec07 plus 15 months is around march 08 and the fireworks really started sept 08. thats 6 months after the 15 months. and move to the situation now 15 months from march 22 is june 23 fireworks start jan 24. hmm.

  13. Corey

    Wallstreet need some minimum wage jobs.

  14. Ava Charlotte

    A number of the most eminent market experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the Federal Reserve's 2% target. As I'm aiming to create a portfolio worth no less than $850,000 before I turn 60, I would appreciate any advice on potential investments.

  15. Deesus

    This man’s timing has been incredibly horrendous. Idk how anyone takes him serious whatsoever.

    2 years of recession calls and he still doesn’t understand that it’s below trend growth.

    Recession will come. Claiming it’s a recession for 2-3 years and when it does happen, which it has not, still makes him wrong.

  16. Jay M

    Luckily, our government has the magical power to print money and push debt into the future.
    It's unlikely each taxpayers will have to fork up $250K.

  17. M Mercato

    We are already at the end of recession !

  18. mjbucar

    EXCELLENT commentary by David Rosenberg on REALITY.

  19. ibrahim seth

    How about you take loans 80T,
    Buy insurans premium one time payment,
    Pay=1:12=Payout.
    InsuransValue20Years=80T*12
    =960T
    Fracture=1/3
    SellNow=960T*(1/3)=320T.
    New loans=80T
    Old loan=40T
    Tenure loan 1 year=(80T+40T)+10% =132T.
    Balance=320T-132T=188T(cash now)
    SellNow means you sell your insurans face value to bank at fraction cost or discount.
    Get now=188T.
    Please note: If you can print the money, please not to think about it, please think otherwise in order to make you stronger in economy like you have nothing and you will try to be a survivor to fight for your life.
    Note: It is just concept, don't bang me about it.

  20. Jacob Covington III

    And we are in a place that seems there is no good news anywhere,
    SO
    ANY MINUTE FROM NOW,MAYBE DAYS, SUDDENLY AND OUT OF THE BLUE THERE WILL BE A GOOD NEWS,
    END IF THE RUSSIA+ UKRAIN SHOW/WAR.
    A SHOW THAT COMMUNISTS OF THE UNITED STATES WHO CALL THEMSELVES DEMOCRAT HAS PLANNED 2 YEARS BEFORE BIDEN STOLE PRESIDENCY.

    ANY DAY FROM NOW THERE WILL BE A NEWS
    THE END OF THE RUSSIA +UKRAIN SHOW.

    AT THIS POINT YOU CAN SEE ALL GAME THAT DEMOCRATES GOING TO PLAY, STEP BY STEP AND THATS THE MOST DISGUSTING THING

  21. Taindra Neupane

    Wall st game of chicken or misleading narrative are always ridiculous….Tough to navigate!imo

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