Chart of the Day 04/07/2011
S&P 500 Corporate Earnings History

Today's chart display S&P 500 earnings going back to the early 1900's on a historical chart, adjusted for inflation.

The details and chart below provide a look at how earnings took a plunge after the "Credit Bubble" high, into the "Financial Crisis" low and how earnings have rose dramatically afterwards. Similar to the market rebound itself so a relation can be drawn between the two.

What's also interesting to note is that you can look at the chart and see that historically, after every rise to prior or new highs, a significant pullback occurred. Sort of like a sign that things were getting out of hand and not going as well as they may have seemed after a while.

So will earnings reach new highs? Or will the "bubble" territory of the past hold once again and a significant pullback follow once again?

With first-quarter earnings season set to officially kick-off on Monday when Alcoa reports first-quarter earnings, today's chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings.

Today's chart illustrates how earnings declined over 92% from its Q3 2007 peak to Q1 2009 low which brought inflation-adjusted earnings to near Great Depression lows.

Since its Q1 2009 low, S&P 500 earnings have surged (up an inflation-adjusted 994%) and currently come in at a level that is greater than what occurred at the peak of the dot-com bubble and not far from its credit bubble peak.

It is interesting to note that the original run up in real earnings from Great Depression lows to dot-com highs took over 67 years. The current spike has taken 20 months.

Chart courtesy of Chart of the Day
Chart of the Day 04/07/2011 - S&P 500 Corporate Earnings History

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