Total U.S. corporate profits (national accounts basis) rose 30.6% YoY in Q4, a huge swing from the -25.1% trend a year ago.
Almost the entire story is in the Financial sector where profits have soared 240%, which is unprecedented...Financial sector profits have accounted for 85% of the overall increase in corporate earnings...
The question is not if the economy is recovering -- the equity market priced out the recession in the first 30% move off the March lows. The last 40% of the rally is discounting the sustainability of the expansion and that prospect is still rather tenuous when one considers that the recovery so far has been one part inventory contribution to two parts government stimulus.
---Rosenberg, 8/12 [My Italics]