Goldman: In Downside, S&P 500 Profits Won’t Recover From Pandemic Until 2023
In a downside scenario, where the recovery from the virus collapse looks like a "check mark" as opposed to a "V", S&P 500 earnings won't return to 2019 levels until at least 2023, according to Goldman.
"We envision this scenario occurring if reopening plans are meaningfully pushed back because the virus is uncontained or if damage to the labor market and businesses becomes more long-lasting in nature", the bank's David Kostin writes, in a noted dated Friday.
He cites rising large company b
looking at cyclicality, trending, and mean reversion of human economic and social activity, (what the Main Street and goods producing/consuming economy is), even Goldman,s recovery numbers are too fast. Taking the reaction to run-of -the-mill major SHOCKS like the Brexit vote, the Trump election, etc., it takes at least several thrusts over many months more likely 13 to 17 months to reach full absorbtion of the impulse Taking the Spanish Flu cycles as COV-19 was one of the biggest shocks of the past 100 years and matches well, the high in infection is in Oct-Nove this year and in March to June, there should be a weaker infection peak. THEN WE CAN TALK ABOUT positive Growth..
Why do you think the increase in cases, hospitalizations and deaths in Florida, Texas, Arizona and California has not roiled markets? If a month ago, you knew what we know now for these 4 states, one might not have thought that NDX would be making new highs day after day?
Sorry but the base case is a dream. Ain’t gonna happen. People will be surprised at top line issues combined with margin/productivity issues. Job losses will be large for years.
This is another step function is the hollowing out of the middle and upper middle class.
Yes, it is going to be disconcerting.
Vlad, I suspect computers and many feeling the fast rebound off lows will be repeated if (or when) more Covid bad news happens combined with TINA and FOMO. Also, lack of selling as many were cautious and not very long. Much safer to hide in FAANG plus MTN etc. if you have to have exposure you won’t lose your job there while you will buying value. Great companies but feels so Nifty 50, late 99/early 00. Longer term returns off these levels look challenging to me.
Kind of a joke to crowd into overowned expensive stuff but that is the money mgmt way.
Sorry, what is MTN?