Yesterday indicates how economic problems in the United States continue to haunt trading days worldwide, and the economic difficulties permeate European peripheral countries. Macroeconomic data are not auguring well for the Americans, and the United States economy could default for the first time in history if it does not successfully renegotiate its deficit before August.
In the midst of this storm, company earnings season is starting. 75% of Dow Jones companies are expected to announce some gains.
The largest companies of the New York Stock Exchange are releasing earnings reports from profits realized in April through June, but the latest predictions from investment banks (collected by Fact-Set) show that corporate profits will fall 5.7%. Profits earned during these months in 2010 totaled $76 billion, and this year this figure could fall to $72 billion.
So if 75% of Dow Jones companies are posting profits this year, why are net global profits falling? Bank of America. Market consensus predicts that the company could announce losses of more than $9 billion dollars.
As a comparison, they posted earnings of nearly $2.8 billion in the second quarter of 2010. At the end of today, estimations for Bank of America made it the only company on the Dow Jones to close the year in the red. This is the third year that the bank has not made a profit