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Data: Federal Reserve Bank of St. Louis; Chart: Chris Canipe/Axios

Companies had a stellar second quarter: profits rose more than 16 percent from last year, according to the Commerce Department. That's great news, right?

Reality check: Look at corporate profits as a share of the economy. That figure is nowhere near its 2012 high point. In fact, the number has not changed that drastically in the last few years.

What's next: The rosy earnings season helped propel stocks to record highs, but some market watchers think the good times won't last. "I really think the big story 6 to 9 months from now is going to be the colossal decline in earnings growth," said Jim Paulsen, chief investment strategist at The Leuthold Group, a research firm.

Here are a few factors that might derail the corporate boom:

  • Waning tax cut benefit: Tax cuts automatically boost earnings, but it's much harder for them to boost earnings growth.
  • Rising rates: Consumer spending sent inflation to a six-year high, which makes more of a case for the Federal Reserve to continue its plan to raise interest rates. The luxurious years of low corporate borrowing costs might be coming to an end.
  • Tariffs: Fears of an escalation of the trade war were a common theme this quarter. Jack Daniel's maker Brown-Forman trimmed its earnings forecast for the year, thanks to the trade war. Retailers, too, are monitoring the situation closely.

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Updated 23 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 4 p.m. ET: 19,193,661 — Total deaths: 716,735 — Total recoveries — 11,611,029Map.
  2. U.S.: Total confirmed cases as of 4 p.m. ET: 4,918,927 — Total deaths: 160,737 — Total recoveries: 1,598,624 — Total tests: 59,652,675Map.
  3. Politics: White House recommends Trump issue executive orders on coronavirus aid.
  4. Education: Cuomo says all New York schools can reopen for in-person learning.
  5. Public health: Surgeon general urges flu shots to prevent "double whammy" with coronavirus — Massachusetts pauses reopening after uptick in coronavirus cases
  6. World: Africa records over 1 million coronavirus cases — Gates Foundation puts $150 million behind coronavirus vaccine production.

Trump: "We are going a different way" on coronavirus aid

President Trump. Photo: Jim Watsonn/AFP via Getty Images

President Trump tweeted on Friday that his administration is "going a different way" with coronavirus aid after negotiations with congressional Democrats stalled again, suggesting he will use an executive order to address stimulus spending.

What he's saying: "Pelosi and Schumer only interested in Bailout Money for poorly run Democrat cities and states. Nothing to do with China Virus! Want one trillion dollars. No interest. We are going a different way!" Trump tweeted.

Trump's swift, sweeping China offensive

Illustration: Aïda Amer/Axios

President Trump's rhetoric on China has tended to run hotter than his actions — until now.

Why it matters: Even at the height of Trump's trade war, his administration never hit China as hard, as fast, and on as many fronts as it is right now.