With second-quarter earnings largely in the books (over 84% of S&P 500 corporations have reported), today's chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates how earnings declined over 92% from its Q3 2007 peak to Q1 2009 low which brought inflation-adjusted earnings to near Great Depression lows. Since its Q1 2009 low, S&P 500 earnings have surged (up an inflation-adjusted 1129%) and currently come in at a level that is well above its dot-com bubble peak and fast approaching its credit bubble peak. It is interesting to note that the original run up in real earnings from Great Depression lows to dot-com highs took over 67 years. The current spike has taken 37 months. Also, current Q2 earnings times four would make for a new inflation-adjusted high for S&P 500 corporate earnings. Therefore, as long as earnings do not decline, S&P 500 companies are on pace to make a new all-time record in earnings by Q1 2013 at the latest.

Current S&P500 Quote & Chart