Investment Review – May 2020

May 19, 2020 Investment Review

  1. 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.

  2. 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.

  3. 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

Disclosure: This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.

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