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S&P 500 is up 19% from 19 March. The rally has undoubtedly been helped by a flattening out of the curve of new corona cases globally and previously unheard-of measures from authorities to ease the default risk burden further, per Nordea.

Key quotes

“Profit estimates have, not surprisingly, continued to get downgraded and S&P 500 is now expected to have -12% EPS growth in 2020 according to Bloomberg. The downgrade process is far from over, in our view.”

“Macro indicators point to a risk of a 30 to 60% drop in earnings for 2020.”

“The current S&P 500 forward P/E of 19.5 is in all likelihood a major understatement of the actual P/E ratio. The equity market is far from recessionary cheap.”