After 15 months of crashing oil prices, falling energy company profits, rising debt overhangs and abandoned oil, gas and coal projects, "overall S&P 500 profit margins are still trending higher as the profit losses in the energy sector are more than offset by increasing margins elsewhere," notes Deutsche Bank analyst Torsten Slok in a short article posted today to clients by Matt Topley of Fortis Advisors, King of Prussia.

The obvious: "Lower energy prices is bad for earnings in the energy sector and some of the industrial and materials sectors but good for the bottom line in all other sectors." Back out Exxon and energy stocks, and corporate profits "are still trending higher...  in particular in tech, healthcare, and consumer discretionary."

The rising dollar is "hurting certain parts of corporate America at the moment [see my recent post on Ace, DuPont and FMC], but with the China shock fading [is it really?] and the dollar and energy prices stabilizing it is becoming clearer that we are not about to enter an economic recession because the service sector – which makes up 85% of the US economy - is doing just fine," Slok adds.

"To generate an economic recession we need a much more broad-based slowdown across companies and that is not what we are seeing and hearing." And don't read too much into Walmart's recent troubles: the largest retailer's problems are all its own, Slok concludes.