Update: Q1-Q2 Data Impact / CARES Act Webinar
Which Data Points Will Truly Paint the Economic Picture?
Now that we have moved into the second quarter, we are looking forward to economic data that will provide clarity into the impact this crisis has had on the economy and its potential impact on the markets down the road.
Up first are corporate earnings for business activity in the first quarter. While we expect these results to be lower than prior guidance, it wouldn’t surprise us if there are significant earnings misses as companies potentially load non-virus-related charges into first-quarter earnings. Adding to the unpredictability of earnings in coming quarters is the practice of many companies, such as Apple, pulling their guidance, which many experts rely upon for forecasting.
Currently, analyst estimates on overall earnings in market indexes, like the S&P 500, are coming in at a very wide range of -6% to -12%, and even wider on second-quarter projections. While we will be absorbing Q1 information very carefully, we believe a much better indicator of longer-term economic direction will be found in Q2 earnings when released in July. We are listening to market and individual company commentary daily to help us prepare for those statistical releases.
Other critical data points we will be watching are unemployment numbers and US Gross Domestic Product, which is the total value of goods produced and services provided in a country during a specific period. Like corporate earnings, we expect this number to come in well below original forecasts. The market also has this expectation as valuations in stocks have fallen well in advance of any data distribution. Currently, analysts believe GDP contraction for the first quarter of 2020 will be on average of -2.1%. And like corporate earnings, we are looking to Q2 GDP results, distributed in July, to be much more telling of the economic impact this crisis is causing.
Rest assured, the Slaughter Associates Investment Committee is analyzing this and other important data to guide us in making appropriate decisions for your individual portfolio.
Webinar: CARES Act – Its Impact on the Economy and You
Tuesday, April 14
10:00 AM – 11:00 AM
Please join us Tuesday for a special webinar presentation from the Slaughter Associates Investment Committee as we address the details of the CARES Act and its impact on the economy and you. The webinar will cover:
- Economic impact of the Act
- Small business and nonprofit relief
- Impact on our clients
Registration is required as space is limited (per our webinar service). After registering you will receive a confirmation email with a link and direction to join the webinar.
Please register by clicking this link:
If you are unable to join us for the live webinar, the event will be recorded and posted to our website for later viewing.