Get ready for Q2 earnings

 In Blog, Newsletter

Issue No. 134


Assets Covered: DAX 30 Stock Market Index, Dow Jones Stock Market Index, FTSE 100 Stock Market Index, India Sensex Stock Market Index, MSCI Thailand Stock Market Index, NASDAQ Stock Market Index, NIKKEI 225 Stock Market Index, NIFTY 50 Index, S&P 500 Stock Market Index


Earnings season is upon us, and reports on the second quarter will hopefully show the full impact of the economic shutdown on corporates.


Many companies tried to push their losses into Q1. As we all know, the full brunt of the pandemic and economic shutdowns occurred in March, April and May, and Q2 earnings are still going to make for some ugly reading. Q2 is expected to be a garbage can for earnings, where every conceivable downside liability is deposited.


On our CI Futures platform, we cover over 170 equity indices. Our July forecast for a 3-month rolling average is showing downward trend across the major indexes: DAX, DJI, FTSE, Nifty, NIKKEI, S&P 500, and NASDAQ.



Equity Indice Forecasts – Historical and Forecasted 3 Month % Change (aop)
Find this and more in our monthly QuickSheet report. Click here to access the report.



S&P 500 Index Performance Q3 2020


According to Factsheet, The CY 2020 bottom-up EPS estimate (which is an aggregation of the median 2020 EPS estimates for all the companies in the index) declined by 28.6% (to $126.89 from $177.82) during Q2.


Our forecasts are showing little upward movement for the S&P 500 Index, certainly not expecting to regain losses seen in March. Projected forecast high over the period is 3,095 and our low 2,994.


S&P 500 Forecast 2020


SP 500 Index SPX Forecast Outlook 2020


S&P 500 Stock Market Index forecast through September 2020
CI Futures generated this chart. Book a demo to see it in action.



A Closer Look at Emerging Markets


Alternatively, our data revealed that the India SENSEX Stock Market Index may perform well over the next three months. Our data is showing an average 7.5% gain July-September. Uday Kotak, India’s richest banker and head of Kotak Mahindra Bank, isn’t concerned about weak earnings projections and grim economic projections.


(See our recent article on electronics manufacturing in India)


Sensex India Index Forecast Outlook 2020


India SENSEX Stock Market Index forecast through September 2020
CI Futures generated this chart. Book a demo to see it in action.



Investors are eyeing emerging markets as a source of growth. However, emerging markets stocks were set for their worst day in nearly one month last Friday due to concerns about rising COVID-19 cases. These stocks were expected to clock their second week of gains on hopes of a gradual, stimulus-induced pick up in global economic activity. We cover a number of emerging market indexes on our platform. Below is our outlook for MSCI Thailand Stock Market Index Futures.


MSCI Thailand Index Forecast Outlook 2020


MSCI Thailand Stock Market Index Futures forecast through September 2020
CI Futures generated this chart. Book a demo to see it in action.


A recent Bloomberg article highlights the fact that investors are looking for ESG, investments in countries and companies that are improving environmental, social and governance standards. According to the article, the pandemic has “put focus on the critical need to build resilience in healthcare, food and water security, and across supply chains,” Ingrid Kukuljan, head of international impact investing at Federated Hermes in London, wrote in a note. “We will increasingly see governments transfer funds to the private sector to address these pressing needs, which has proven true during this crisis.”


Rare earths, precious metals