Macro interpretation
Written by: Jingjing He
2020-03-25 07:15
Last updated: 2020-03-25 07:33
The U.S. Congress is expected to pass the White House ’s huge fiscal stimulus package. In addition, the epidemic situation has not deteriorated. US stocks rebounded strongly on Tuesday (24th). The Dow rose sharply by 2112 points (11.37%) to 20704 points, re-entering the 20,000 mark. Counting is the largest single-day increase in history, the largest increase since 1933 in percentage terms; the index rose 9.38% to 2447 points, the second largest ever increase in points; the Nasdaq rose 8.12% to 7487.
Looking forward to the market rescue policy, the energy and aviation-related sectors led the gains. Chevron, the second largest oil company in the United States, suspended the repurchase of shares and reduced shale oil investment, spurring the stock price to rise sharply by 23%. It is the largest gainer in the Dow. Delta Air Lines and Boeing rose 21%. S & P's energy stocks rose 16.3%, while industrial and financial stocks also surged 12%.
Oil company Chevron shares surged 23%, making it the Dow's biggest gainer. (Reuters)
Expected to recover all declines as soon as June
The sharp rebound in US stocks has stabilized market confidence, and more analysis indicates that US stocks are expected to show a V-shaped rebound. Fundstrat's equity analyst Tom Lee has counted 10 stock market crashes that have fallen by more than 30% since 1920 and found that it takes only half the number of days of market decline to recover the V-shape to recover nearly half of the decline. He pointed out that if the market falls to the bottom this week, it is very likely that there will be a V-shaped rebound instead of an L-shaped or U-shaped rebound. As soon as April, the S & P will rise to the level of 2800 points. According to historical statistics, it takes an average of 3 to 4 months for the V bomb to recover all the declines, that is, the S & P may return to about 3400 points in the summer.
He pointed out that there are already signs of bottoming out in the stock market. For example, the number of new cases of pneumonia in Italy and the number of deaths have fallen for two days, which means that Italy is close to South Korea. It may take about 43 days to reach the peak of the epidemic, that is, the United States is leaving The peak of the outbreak may be only 14 days. Moreover, there has been a lot of progress in the treatment of epidemics.
Vincent Reinhart, chief economist of BNY Asset Management, also pointed out that if the fiscal stimulus package goes into effect, the Fed also supports the market to continue to operate smoothly, and the epidemic situation has peaked, and this season is expected to be the "only really terrible quarter". With a lot of fiscal and monetary stimulus policies, the economy is expected to rebound in the third quarter, and the economy will "perform strongly" in the fourth quarter.
JP Morgan expects S & P to pick up to 3,400 points early next year. (Reuters)
JP Morgan Chase: See 3,400 points in the first quarter of next year
JPMorgan Chase strategist Marko Kolanovic said that there are signs that the United States ’anti-quarantine measures have achieved results. Among them, San Francisco, the first to implement a“ foot ban, ”has seen flu-related infections decrease, lower than average. Infections in other cities will slowly decrease.
He pointed out that if these anti-epidemic measures are effective, the US economy and stock market will rebound faster than expected. It is expected that the S & P 500 Index will return to historical highs by the beginning of next year. It is expected that the S & P 500 will meet 3400 points in the first quarter of next year.
Earned 58% last year and outperformed the market ’s well-known fund managers this year
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Citi: Corporate earnings forecast still has room for significant downward revision
Wall Street is not a good one. Citi strategist Buckland said that the index reflecting corporate future profits has fallen to a record low, worse than during the financial crisis. It is expected that corporate profits will decline by 20% this year. Compared with the market, companies are still widely expected. Earnings can grow by 4%, and there is still room for significant downward revisions in earnings forecasts, which will continue to put pressure on the market.
In fact, the recent US economic data is generally expected to be very "scarring". St. Louis Federal Reserve President James Bullard said that the short-term unemployment rate may be as high as 30%, which is more than that during the Great Depression. difference. Some analysts also expect the US economy or recession to be as high as 20%.
US stocks war report
