Wall Street faces profit recession as earnings season begins

New York

WALL Street's fourth-quarter earnings season that is about to get under way could confirm something that many investors may not want to hear: the US economy may be doing well but corporate profits are in a recession.

An earnings recession - two quarters of declining profits - would be led by the usual suspects, energy and materials companies. But its severity may depend on consumer discretionary companies, which have been warning about profits at an unusual pace.