Despite the recent stock market rebound , the financial sector is struggling , contracting in 12 of the past 15 months , down 2 % YoY , with the worst growth rate since 2009 . While not indicative of an economic recession , falling industrial production historically has been consistent with a profits recession which has been ongoing for several quarters . According to economic analysts , non - financial profits fall at an average rate of 4.5 % YoY when industrial production declines YoY. investors must be aware that for the stock rally to continue , there needs to be an upturn in earnings growth .
Despite the recent stock market rebound, the manufacturing sector is struggling, contracting in 12 of the past 15 months, down 2% YoY, with the worst growth rate since 2009. While not indicative of an economic recession, falling industrial production historically has been consistent with a profits recession which has been ongoing for four quarters. According to Bloomberg data, non-financial profits fall at an average rate of 4.5% YoY when industrial production declines YoY. Investors should be aware that for the stock rally to continue, there needs to be an upturn in earnings growth.