Tuesday, September 22, 2020
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Earnings are expected to improve dramatically. Which isn’t always great for stocks.
The stock market’s tough September continued on Monday.
All three major indices fell to start the week with the S&P 500 declining for its fourth-straight day, its longest losing streak since February.
And so after the market enjoyed its best August in decades and the rally off of the March lows seemed unstoppable, bulls are now facing the biggest test since the spring. And the upcoming earnings season poses a huge challenge to the market’s current narrative.
In a note to clients on Monday, Nick Colas, co-founder at DataTrek Research, flagged the following chart from FactSet, which shows how investors expect corporate earnings to evolve in the coming year.