Market Outlook · July 31, 2020

COVID-19 and the Path of Corporate Earnings

Brent Ciliano

CFA | SVP, Chief Investment Officer

1 COVID-19: Where are we now?

While we're neither doctors nor epidemiologists, it's clear COVID-19 isn't going away anytime soon, and the pandemic’s progression, in many ways, is dictating the path of economic recovery. It isn't the number of cases that directly affects the economy and corporate earnings—it's the governmental response to the cases.

2 Second quarter corporate earnings season

Second quarter earnings are on pace for a 35.7% year-over-year decline—an incredible decline but still better than the 69.1% year-over-year decline in the fourth quarter of 2008. In top-line results, 69% of companies have reported a positive revenue surprise, also above the 5-year average.

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