Worries About The Economy Weigh on Markets

Old_Skeet

The bullet points follow:

Signs that the coronavirus pandemic is easing drove stocks higher on Tuesday, even as the first batch of quarterly earnings showed the outbreak is taking a toll on corporate profits. The Dow climbed about 560 points, helped by Johnson & Johnson, Microsoft, and Apple which rose 4.5%, 4.9%, and 5%, respectively. The S&P 500 also registered a significant gain, rising more than 3%.

The market rallied on the idea that “maybe the worst of the economic freefall is over” and talk about reopening the economy, Charles Schwab’s Jeffrey Kleintop told CNBC’s “Squawk Box Asia” on Wednesday morning Singapore time. But Kleintop, who is chief global investment strategist at Charles Schwab, warned that “the stock market may have a tougher time from here.” He said one unknown is the possibility of a second wave of infections as lockdown measures lift.

New York Gov. Andrew Cuomo’s optimistic tone about the outbreak in his state, the epicenter of the pandemic in the United States, also boosted investor sentiment. He said Tuesday deaths related to the virus in the state are leveling off.

Still, the dismal earnings ahead from U.S. companies grappling with the coronavirus shutdown could spook investors. Analysts expect S&P 500 earnings growth to decline 10.2% in the first quarter year-over-year, according to Refinitiv.

Generally, bank earnings came in well below expectations on Tuesday due to the economic impact of the coronavirus. However, JPMorgan’s trading division also posted a 32% increase in revenue to a record $7.2 billion.

For the first quarter, 88 negative earnings pre-announcements have been issued by S&P 500 corporations, according to Refinitiv. A wave of major companies has already withdrawn their full-year guidance.

https://www.cnbc.com/2020/04/14/stock-market-futures-open-to-close-news.html

catch22

Still, the dismal earnings ahead from U.S. companies grappling with the coronavirus shutdown could spook investors

I don't know who the investors may be, but I can readily envision the largest 5,000 of global market makers swapping and trading among themselves attempting to discover the profit areas, be it equity or bonds; one hour at a time.

Old_Skeet

Yes, @catch22, I'm thinking that the S&P 500 Index's earnings will be in the mid 120's while S&P has them projected in the mid 130's. With a 5% earnings yield this equates to a valuation for the Index somewhere in the 2500 to 2700 range through summer. Naturally, it can certainly trade outside of this range. Come fall I'm looking for things to pick up.

catch22

I presume this statement is relative to investment markets and not society.

Come fall I'm looking for things to pick up.

I remain to the thought that the glide path to "happy time" from a societal aspect is not close at hand. This circumstance is going to continue to impact various sectors of investments, due to consumer confidence and/or ability; or willingness, to spend.

Aside from daily data regarding COVID, remains the confidence of the public to become fully involved in "normal". From a northern perspective, is the great winter season migration to points south for several months. I suggest this area will provide a decent indicator of what is taking place.
I know several folks who own near beach front condos. They stay for several of the winter months, and then rent to in-state folks for the summer months for vacation time. Many of their neighbors don't stay at their own units during the winter months, but rent the unit for the winter season. These condo's are part of their investment portfolio.
All of the owners, from about 1 month ago; have all summer rental reservations cancelled. What remains to be seen is how many reservations will be placed and/or cancelled for those who need to plan ahead to the coming winter season of 2020.