In the wake of first-quarter reporting season, the consensus is probably still too optimistic

At -12% for the S&P 500 in the US and -35% for the Stoxx 600 in Europe, first-quarter results were hit hard by the pandemic, even though it had hardly begun by the end of the quarter. It is therefore a safe bet that results will be even worse in the second quarter but also that they will bottom out for the year. Even so, the consensus still looks far off the mark for both second-quarter results and for 2020-2021. Consequently, the positive impact from reopening the economy already appears to be priced in by far.

Now that first-quarter reporting season is almost over, it’s time for an initial assessment. Although the pandemic was still far from peaking in the first quarter, it still hit numbers hard. For the first time since 2015, quarterly results dropped significantly, including by 12% by the S&P 500 in the US and by 35% for the Stoxx 600 in Europe.

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