via MarketWatch:
An earnings recession is now nearly certain. With 456 of the 505 S&P 500SPX, -0.66% components, or 90.3%, having reported second-quarter earnings through Friday morning, the blended year-over-year EPS growth estimate is negative 0.72%, with six of the 11 sectors showing declines, according to FactSet. That means the remaining 49 companies have to report EPS growth on average of 6.70% to lift the S&P 500 growth to flat. A Q2 earnings decline would follow a 0.21% decline in the first quarter; a recession is generally defined as two consecutive quarter of negative growth. The last time there were back-to-back quarters of negative EPS growth was the second quarter of 2016. For Q2, the sectors with the biggest EPS declines are materials XLB, -0.79% at negative 17.88% and industrials XLI, -0.84% at negative 10.19%, according to FactSet, while the biggest increase is health care XLV, +0.12% at positive 8.85%. Meanwhile, the third-quarter EPS growth estimate is currently negative 3.31%. Despite the EPS declines, the S&P 500, which shed 0.7% in morning trading Friday, has gained 1.6% over the past three months and 16.4% year to date.