Wall Street is wrong, there will be a revenue recession this year

Morgan Stanley is calling for a generalized earnings recession, while many other badysts say a quarter is negative and earnings growth has turned positive again in the second quarter.

Source: Morgan Stanley

Morgan Stanley expects a continuation of negative growth, but Credit Suisse strategists announced Monday that they hoped to avoid a profit recession. Bank of America Merrill Lynch badysts are also expecting earnings above consensus and positive after a flat first quarter.

Analysts at Bank of America Merrill Lynch, however, reduced their S & P earnings guidance for the year Monday to a 4% growth, against a previous forecast of 5%. Analysts expect a gain of 4% for the second quarter and again in the third quarter with an increase of only 1%.

Morgan Stanley Wilson also looked at the profit forecasts at the industry level and said they were much worse in the first quarter than in the fourth quarter, as all major sectors posted positive earnings growth and Only one posted negative sales growth.

For the first quarter, badysts expect negative earnings growth in seven of the top 11 sectors. The health, utilities and real estate sectors are among the sectors that should be positive.

"The biggest drag on profits should come from Tech, which is expected to contribute -2.1% to the total figure," Wilson said. "The overall profit growth in the sector should be -10.6% with [subsectors] Semiconductors and Tech Hardware expect a substantial decline in earnings growth to -24% and -16%, respectively. "

Energy revenues are expected to be the worst of all major sectors at -20.1%. S & P 500 index sales growth is expected to be positive, up 4.8% in the first quarter, but the energy and technology sectors are expected to experience negative growth.

Results season begins on Friday with J.P. Morgan Chase and Wells Fargo's first quarter results on that day.