The US markets followed their European counterparts lower as investors are still focused on the unfolding negotiations surrounding Greece’s debt problems. Before the opening bell rang, a Greek official told reporters in the European Union that the government’s proposed measures had not been accepted by international creditors. At the same time, the US economy shrank at an annual rate of 0.2% in the first quarter of 2015, which was slightly better than the initial 0.7% drop reported in the second estimate. The exports decreased less than previously estimated and personal expenditures and imports increased by more, but manufacturing remains a huge source of weakness across much of the country.

While the world waits for an answer on Greece and the US markets digest the latest gross domestic product (GDP) figures, there is one rather interesting report that coincides with GDP: corporate profits. The Bureau of Economic Analysis (BEA) provided a review of corporate profits in the Q1-2015 GDP revision and showed that they fell by 5.2% at a quarterly rate over this period. This is rather large compared to the 1.4% quarterly decline from Q4-2014. However, despite these figures and all the negatives recorded within the data, the numbers are actually quite positive, because compared to the same period a year ago, corporate profits have actually increased. Total corporate profits in the first quarter came in at $1.891 trillion, which was up by 9.0% (from an initial reading of +9.2%). Profits are after taxes without inventory valuation or capital consumption adjustments – so this year-over-year change is quite compelling. Currency adjustments are also a large concern that many feel will stay put into the latter half of the year. Nevertheless, the year-over-year changes are optimistic for the near-term health of the economy, even though much of this data is very backwards-looking. Judging by many company’s Q1-2015 earnings, corporate profits ought to improve further into the second quarter.