Although the rebound in US equities since the Global Financial Crisis (GFC) contrasts starkly with their protracted slump after the Great Crash, it has been largely justified by a rebound in corporate profits that did not materialise then. This also explains why a rebound in equities since the GFC has not been seen in other economies, where earnings have similarly failed to recover. Nonetheless, we think that the prospects for profits in the US are bleak and expect equities there to come under more fire later this year.
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