The stock markets recovered yesterday after Wednesday’s sell-off. However, two risks still lie dormant in the short time frame.
The stock markets recovered yesterday after Wednesday’s sell-off. However, two risks are still dormant in the short time frame, which have probably not yet been priced in. Firstly, the rising number of corona cases in the USA, which makes (regional) lockdowns more likely again. This makes an already priced-in V recovery of the economy extremely unlikely. And secondly, the US reporting season is now approaching with great strides. Yesterday Nike’s figures were well below expectations. Are the stock markets underestimating the consequences of the corona crisis for companies? What is interesting is the glaring contradiction between the expected economic recovery and the expectations for US corporate earnings in the next four quarters.