Opposites Attract - S&P 500 VS Corporate Profits

The S&P 500 has been in a strong bullish uptrend for the last 7 years. Since hitting the multi year lows back in 2009 during the financial crisis where it reached a low of 666, the S&P 500 has climbed to an all time record high of 2193 on August 15th.

Over the last 15 months or so an interesting trend has been developing with corporate profits and the S&P 500. Corporate profits have fallen for a consecutive 5 quarters, which has not happened since the 2008 - 2009 financial crisis. Yet the S&P 500 has experienced two short and brief corrections over the same period on its way to making new all time highs.

Eventually this trend will correct itself similar to the period between 2006 - 2008. Either corporate profits will start growing again in the US and correlate with the S&P 500 trend, or the S&P 500 will correct and reconnect with the falling corporate profits trend.

Click Chart for Source: Zerohedge

Bonus Chart:

US 2016 GDP expectations have been slowly falling since the middle of last year recently making new lows around the same time as the S&P 500 reached a new record high.

Click chart for source: Zerohedge.com