The stats on Web traffic here at the Report on Business provide a daily reminder of how pervasive investor fear has become. Put “bubble” or “impending market apocalypse” in the headline and your story is nearly assured a trip to the top of the hits list.
What’s behind investors’ anxiety? Part of it is memories of the financial crisis. But among professional market watchers, the overwhelming fear has to do with corporate profits. Earnings are now at record levels relative to the size of the U.S. economy, which suggests they could collapse if profitability reverts to its long-term average.