Last week saw a pause in the rally in the equity markets as the S&P 500 dropped 2.26 points or 0.17%. The markets continue to watch negotiations with Greece and this week Moody’s downgraded six European nations including Italy, Spain and Portugal. In addition, the firm warned that the U.K.’s rating could also be at risk. Any slowdown in Euro zone economies will be a drag on the earnings of many large U.S. companies.
Positive earnings surprises for 4Q 2011 continue to lag prior quarters and profit margin improvements are stalling out. In the 4th quarter productivity, as measured by output per hour was up just 0.5% from the prior year.
2012 may be a challenging year for corporate profit growth.
“I shall make the most of all that comes: And the least of all that goes”
- Sara Teasdale