/biz/ - Business & Finance

>Analysts are expecting quarterly earnings growth of -40.6% in Q2, -23.0% in Q3, and -11.4% in Q4.
>For reference, Q1 earnings growth was -13.6%.
>Many companies chose to drop earnings guidance due to the uncertainty of Covid-19. This may place future quarterly estimates too high, meaning that a slow drip of bad news and a period of revisions to earnings forecasts lie ahead.

>The S&P 500's forward P/E is 20.4, above the 5-year average (16.7) and the 10-year average (15.1). This indicates an overvaluation.
>Since March 23rd, the price of the S&P 500 has increased by 28.8%, while the EPS (ftm) estimate has decreased by 16.2%.

>The trillions of dollars in liquidity being injected into the market by the Fed is artificially stabilizing the market and exacerbating asset prices.
>This over-reliance on central bank intervention, coupled with grim Q2 projections, means a major correction is in store.
>This will likely occur once the Fed decreases their buying in coming weeks from $2.4 billion to $608 million in financial assets per hour, a 75% reduction.