What you're not hearing about the one thing that makes recession impossible right now

A payrolls contraction in June seems to set the stage for a recession. But there's never been a recession when the yield curve wasn't inverted. More important, there's never been a recession without a decline in 365 days-ahead S&P 500 consensus forward earnings. There was a short shallow forward earnings dip earlier this year associated with the Q1 GDP contraction and a 20%-plus correction in stocks. But now every sector has recovered from that, with S&P 500 earnings up 8.4% in just the five months since their May bottom. Estimates for the Magnificent Seven have grown even more, but the majority of earnings growth has accrued to the S&P 493. A major driver is the One Big Beautiful Bill, with its major pro-growth corporate tax cuts that are both permanent and retroactive, totaling about 5% of S&P 500 earnings. When the tariffs are struck down in the Supreme Court, refunds will be another 4%. Both fall straight to the bottom line, and straight to free cash flow.