Stocks opened higher. The S&P 500 opened higher this morning as markets remain fixed on the COVID-19 headlines, oil prices, and earnings season. President Trump will sign the $484 billion COVID-19 relief bill into law today. Oil prices are higher but remain below $20 per barrel, based on June settlement of the futures contract. Today’s economic calendar includes durable goods orders for March and University of Michigan Consumer Confidence, which will provide more stark evidence of the depth of the economic downturn.
What do earnings look like in recession? Perhaps the most important question this earnings season is how far 2020 earnings might drop. Historically, declines of 20% or more during recessions are not uncommon. With so many companies pulling guidance and the lack of clarity around the timing of the re-opening of the economy, current consensus estimates calling for a 15% decline in S&P 500 profits this year may prove overly optimistic. We discuss this more today on the LPL Research blog.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
The term Futures refers to future contracts, a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset) at a predetermined future date and price. Contracts detail the quality and quantity of the underlying asset, and are standardized to facilitate trading on a futures exchange. Futures are used to either hedge or speculate on the price movement of an underlying asset, such as a physical commodity or financial instrument.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This Research material was prepared by LPL Financial, LLC.
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking 1 -05002792