Investment Review - May 2020
- The major U.S. equity indices finished April with one of their best months in history, with the S&P 500 rallying 12.7%. The market appears to be pricing in a quick recovery from the coronavirus and its related disruption of business.
- Year-end 2020 and 2021 consensus earnings estimates for the S&P 500 have been coming down over the past two months as companies report Q1 earnings and deliberate the impact of the nationwide shutdown. Analysts’ consensus estimates for the S&P 500 earnings are currently $133 for 2020 and $167 for 2021. This compares to $163 in 2019. 2020 earnings are dependent on the pace and success of reopening the economy over the next several months, while 2021 is expected to be a return to normalcy.
- The oil industry remains under pressure as the price of a barrel of oil continued its decline in April. WTI crude began the month at $21 per barrel and closed the month at $18, after having traded in negative territory during the month. A glut of supply as economic activity declines has been a big driver of lower oil prices.
Sources: Bloomberg LLC, FACTSET, U.S. Department of Labor
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