The good news for markets is that investors may
not care as much this time around.
The economy has already begun to show some
signs of improvement, with the job market, retail
sales and other areas beginning to grow again
after a precipitous plunge.
That has many investors looking beyond the
results for the second quarter, which analysts say
should mark the bottom for earnings declines,
and ahead at the prospect of a return to growth
in early 2021. Of course, just like with the
economy, forecasters say it could take years for
corporate earnings to return to the levels they
were at before the pandemic.
Nevertheless, the S&P 500 has stormed higher
since late in the first quarter, nearly all the way
back to its record level, based in large part on
such patient hopes.
Low expectations for this earnings season also
mean CEOs have an easier hurdle to jump. A
handful of companies have already seen big
leaps for their stock prices after saying they
expect to report results that weren’t quite as bad
as Wall Street had forecast.
On Monday, for example, miner Freeport-
McMoRan said it sold more gold and copper
during the latest quarter than expected. Even
though it still expects to report a small net
loss, its stock surged nearly 11% following
the announcement.
Strong results from some early reporters, along
with improving economic data and other
measures, mean analysts at BofA Global Research
say this earnings reporting season could offer “a
healthy beat,” compared with expectations.