said they were undergoing a production hell and this year, it seems to be a logistics hell. we got the second quarter earnings kicking off off yesterday. it seems as if that all signs are pointing to an earnings recession. especially because we have this trade tension between the u.s. and china lingering. what more can you tell us about it? that s right. it seems that given the stock markets are at horde highs but that s the expectation for the street. we are into the heart of earnings season. we started off with banks earnings seasons yesterday. citibank reported pretty much in line with expectations but i think the bigger question that people are going to be asking is what the tech sector is go going to pose for this earnings season and many are there expecting an earnings recession of up to 12% as the trade war clearly is impacting those companies from a supply chain perspective. you want to watch out for the airlines will be reporting as
corporate earnings in week. jp morgan chase, ibm, netflix and microsoft are among the companies reporting results. wall street bracing for disappointing numbers overall for corporate america. earnings are expected to fall 2.6% in the second quarter after profits already declined slightly in the first quarter. it would mark the first time in three years that earnings have fallen back-to-back. as an earnings recession is coming, why are stocks trading near record highs? you can thank the federal reserve in hopes for resolution for u.s./china trade talks. jerome powell strongly hinted that the central bank s&p 500 topped 3,000 and the dow hit 27,000, both for the first time. in new york, i m christine romans. [leaf blower]
argue against that. yes. stocks hitting fresh new highs again today on the backs of yesterday s close. look, investors should look at things like the willshire 5,000 index, not just the dow or the nasdaq or the s&p. it s encompassing a broad measure across the board and it s a broad indicator how well the economy is doing. i think that second quarter earnings results will be pretty good in the second half of the year. may prove to be better than the first half. charles: here s the irony. the federal reserve, jay powell, gave testimony the last couple days, spent time talking about concerns. not factual things, concerns, weakness around the world washing up on our shores. how much of that is a potential threat to derail this rally? we re going to have an earnings recession. we basically had profit margins squeezed by the dollar moving higher, input costs going up. earnings are decelerating,
hi, ana. big we now, can the january rally last after that big meltdown at the end of 2018? corporate earnings are likely to drive things from here on out. last week, big banks reported mostly positive results helping to power stocks higher and now investors see opportunity. i think what happened at the end of the year last year was that the market actually started to price in an earnings recession for 2019. we have to ask ourselves how realistic is that? we think the likelihood of earnings growth is actually much higher than an earnings reception for sure. reporter: this week procter & gamble, ford motor, starbucks, johnson and johnson are big companies reporting quarterly earnings. keep in mind, it s a short week on wall street. monday, trading is closed for the martin the holiday. in new york, i m christine romans. [leaf blower]
s&p 500 so we are doing buying for coins. it will take such an act of god to have earnings go down 20%, to really get into an earnings recession to make this market go even lower. so i think the bottom line is, even if we have flat earnings growth, that s okay. even if we have four or 5%, that s okay because the market can still rise on that. we think as of right now on christmas day, i think you have 10% upside and a little less than 10% downside, and, and it s going to take a lot to get it there by next year. you have gdp growth and jobs being added. in other words, the fundamental fundamentals, for now anyway,