Corporate profits tend to be a long leading indicator, which means they will turn up or down long before the broader economy turns up or down. This means that when corporate profits turn down, we can expect a downturn in the stock market several quarters later. Conversely when corporate profits turn higher it can mean a bull market in stocks is on the way. The downside to using corporate profits in this way is that they are not reported until two months after the fact, so in a rapidly improving or deteriorating economic situation they may come too late to predict the change in the broader market