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Don't bank on stock market gains once earnings start to fall

The US Q2 earnings season kicks off today. The news is likely to be downbeat, with the annual growth rate of profits reportedly expected to be negative for the first time since 2009. In recent months investors have shrugged off this prospect and sought solace in the Fed and the ECB. But history is not on the side of those who expect the market to continue to prosper once the earnings cycle has turned. 

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