There's one big word we're not hearing this earnings season.
China, industrial slowdown, auto sales slowdown.
The one word that is not being uttered on conference calls: recession.
The U.S. consumer – the engine of global growth – is still holding up, according to CEOs and CFOs who have spoken on their company conference calls in the last few weeks.
It's one reason why the S&P 500 is poised to hit a record high on Monday, up more than 20% year-to-date and completing a rebound from an August sell-off.
Almost 200 companies in the S&P 500 have reported third-quarter earnings.
"Of the 500 companies that have reported over last month, just 32 mention recession on their calls," said Nick Mazing of Sentieo.
And that – along with the hopes for a trade deal breakthrough – is the major reason the S&P 500 is knocking on the door of a record high.
Here's a sample of recent conference call comments on the prospects for a recession in 2020.
Bank CEOs optimistic on consumer
Harris Simmons, CEO of Zions Bancorp: "We don't see any indications of a broad-based recession on the horizon."
Jack Barnes, CEO, People's United Financial: "We feel that we are not on the verge of a recession."
CFO Darren King, M&T Bank: "While there is a potential recession building, we're not seeing or hearingings signs of a slowdown."
Credit card companies: U.S. consumer strong
Richard Fairbank, Capital One CEO: I I think the US economy and the US consumer is in pretty good shape. " He went on to note that delinquencies and charge-off rates are rising, and payment rates are rising.
Visa Vice Chairman Vasant Prabhu: "From the numbers we've seen for the last two quarters, you can see that all of our key business drivers, payments volumes, processed transaction and cross-border volume have been stable …[O]ur outlook assumes that the trend has been in place for the past couple of quarters, continue through fiscal year 2020. "
CEOs in other sectors are also expressing the same sentiment.
The consumer is holding up
Stuart Miller, Lennar CEO: "I know there is a lot of questions about the future potential recession and things like that. Our customers don't seem to be viewing it that way. And I think that the housing market, in general, seems solid and strong and continuing to improve. "
Kurt Barton, CFO of Tractor Supply: "[W]"I'm not seeing any indications at this point of any slowdown."
Michael Roth, CEO, Interpublic Group: "I don't see any signs of a 2008 or '09 recession, right now. … If there's a recession, it's going to be recession lite."
The word "slowdown", though most companies seemed to be more optimistic about 2020.
Patrick McHale, CEO, Graco: "[T]"I think, on industrial activity across the board."
Michael Larsen, CFO, Illinois Tool Works: "We did see a modest slowdown, particularly on the capex side here in Q3. … [W]hen we look at the underlying activity in these businesses [food equipment and test and measurement] and the order rates, they're actually looking pretty good heading into Q4. … The remaining segments are pretty stable. "
Donald Allan, CFO, Stanley Black & Decker:[W]e've seen a slowdown in the second quarter and continue in the third quarter.
What's this all mean?
"From a business manager's perspective, these comments indicate that it will unlikely become a self-fulfilling prophecy," said Sam Stovall, chief equity strategist at CFRA.
The economic narrative, he said, has shifted from "recession" earlier in the year to "slower but stable growth," a far-less dire scenario: "We may have a lower trajectory of economic expansion, but certainly not a recession."