Many optimistic investors were attempting to shrug off the European economic slowdown several months ago, including the ECB, claiming a rebound was just around the corner in 2019, the data is here to refute that claim.

Even outlook for Wall Street earnings has deteriorated significantly in recent months, data shows, raising the risk that companies in the United States may slip into recession before its economy does – with Europe close behind

Analysts on average expect the S&P 500’s first-quarter earnings per share to drop 0.3 percent year-on-year.That’s a big drop from the 8.2 percent rise expected as recently as October and would mark the first contraction in U.S. company earnings in three years.Analysts have also made deep cuts to forecasts for the rest of the year. They still expect growth in the remaining three quarters, meaning Wall Street would avoid a technical recession typically defined as a fall in two consecutive quarters. But only just, as the lowered growth forecasts are meager.

The full-year estimate stands at just 4.2 percent now, down more than half from 10.2 percent in October.It’s pretty gloomy on the other side of the Atlantic too. Analysts anticipate barely any growth among European companies listed on the STOXX 600 at the slowest in 18 months, data shows.

 The economic data across the Eurozone has deteriorated at an accelerated pace in 2019 as the probability that the entire Euro Area falls into a recession is rising. While Italy is the only country that is in an officially declared recession at this point, the data is suggestive that Germany, France, and the broader EU are not far behind.
The other important factor is the earning recession has arrived.A string of disappointing forecasts from S&P 500 companies has led one of Wall Street’s leading market strategists to warn of a potential drop in earnings this year. Michael Wilson, chief US equity strategist for Morgan Stanley, slashed his base-case estimate for 2019 earnings per share growth to 1 per cent, down from 4.3 per cent. By contrast, Wall Street’s consensus estimate calls for earnings to grow 5 per cent to $170 a share, according to FactSet.