(Bloomberg) -- As earnings season draws to a close, so does the S&P 500 Index’s profit recession. But that doesn’t mean the coast is clear for Corporate America.
Yes, profits are up 4% year-over-year with over 90% of S&P 500 firms having reported results for the third quarter, meaning a three-quarter streak of earnings declines is likely done, data compiled by Bloomberg Intelligence show.
But the catch for companies and investors is that earnings and outlooks from bellwethers like Target Corp. and Walmart Inc. are raising concerns about the health of the consumer — the engine that powers two-thirds of the US economy. The worrisome signals, amid higher interest rates and dwindling savings, put added focus on a bevy of results ahead next week from other major retailers, including Best Buy Co. and Dick’s Sporting Goods Inc.
“The outlook is murky for retailers because consumers are fickle,” said Louise Goudy Willmering, a partner at wealth-management firm Crewe Advisors. “While we’ve seen consumers’ willingness to spend on discretionary items turn on a dime in the past, we don’t see a significant spending slowdown yet. If there is one, it may be well into 2024.”