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J. P. Morgan is upbeat about the profits outlook.
Profits of S&P 500 companies actually fell in the third quarter.That has prompted investors to opt for companies where the profits outlook is both robust and reliable.
As the economy slows, companies start to feel the effect and revise down their profits outlook; Caterpillar was a case in point yesterday.
But that can't go on forever; either the workers will be unable to afford the goods produced and sales will stagnate or high returns on capital will attract more investment, and thus competition that drives down returns.Geopolitical risk may have sparked this latest sell-off but there may also be a dawning realisation among investors that they have been too complacent about the profits outlook.
So the key to the profits outlook is economic expansion.
So vibrant is global trade that the profits outlook is like those super-bright LEDs popping up everywhere.
Similar(44)
Both also raised their profit outlook for the year.
Johnson & Johnson also increased its full-year profit outlook.
Regulatory changes could also cloud the profit outlook, executives said.
The company also cut its full-year profit outlook 40percentt.
The company said its profit outlook had not changed.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com