A golden age of corporate profits
The bonanza is bolstering the stock market, but it may also be playing a role in the sour mood of the electorate.
TL;DR
- Corporate America is experiencing record profits and capturing the largest share of U.S. income.
- Third-quarter earnings for the S&P 500 are projected to grow around 29%, following a 50% increase in the second quarter.
- The AI boom is a major driver of these profits, with AI infrastructure stocks expected to lead S&P 500 earnings growth.
- A few companies, like Micron Technology and Nvidia, are anticipated to contribute a substantial portion of the overall earnings growth.
- Broader economic data also indicates strong corporate profitability and record profit margins.
- The labor share of national income has significantly declined, reaching some of the lowest levels on record.
- The decline in labor share may contribute to negative public sentiment and skepticism towards the AI boom.