The 19 countries that share the euro currency are projected to collectively expand 1.5 percent this year, down from the 1.7 percent projection. And Latin America, still suffering from China's slowdown, is expected to shrink 0.5 percent this year, down from a January forecast of plus 0.3 percent. This contraction is led by Brazil whose economy is projected to shrink 3.8 percent this year.
All this bad news has led the IMF to cut its global growth forecast for the fourth time in the past year, this time from 3.4 percent, to 3.2 percent. Last year the global economy grew 3.1 percent, its slowest pace since the recessionary year of 2009.
U.S. Q1 GDP, according to the Atlanta Fed model, is set to grow by a meager 0.3 percent. The Atlanta Fed's model doesn't include an estimate for nominal growth, but using last quarter's GDP deflator, we can glean that Q1 nominal growth (inflation + real growth) will be about 1.2 percent. Nominal GDP growth of just 1.2 percent is beyond pitiful. And since S&P 500 earnings tend to grow with nominal GDP, we can make the same sorry assessment about the health of U.S. corporations.