Stocks soar as sales and earnings slow.

You tell me – how long can that last?

S&P 500 companies continue to report third quarter earnings. And it looks as though sales and earnings are set to decline.

While sales have declined the past two quarters, we haven’t seen both sales and earnings decline since the third quarter of 2009!

Can’t have that! In today’s economy, slowdowns aren’t an option. If a problem arises, central banks just whack it with more stimulus!

So as signs of more stimulus emerge in China and Europe – sure enough, stocks continue to rally. Bad news continues to be good news for the market on crack.

I’ll ask again: how long can they keep it up?

Sales have declined for three quarters straights as the chart below shows. Thomson Reuters forecasts that in the third quarter, earnings per share will drop 2.8% while sales drop 4%.

This doesn’t end well, and people are beginning to see it.

“The industrial environment is in a recession. I don’t care what anyone says.”

That’s from Daniel Florness, the CFO of industrial distributor Fastenal Company. Meanwhile, businesses from Caterpillar to Johnson & Johnson keep lowering estimates.

Here’s that chart:

The worst results continue to come from the energy, manufacturing and basic materials sectors. The explanation has been that since China is slowing, commodities are suffering, which hurts emerging countries too. And the rising dollar and falling oil prices are hurting U.S. exporters.

So the energy sector is expected to see sales drop by a third and profits by nearly two-thirds, versus the third quarter last year.

That’s at oil near $50.

What if it hits my target of $10 to $20?

We also saw the jobs data come in weaker than expected in August and September.

The next graph tells the story better:

Private sector jobs have gone from highs of near one million on a three-month change in late 2014… to 0.4 million in September.