Bloomberg Intelligence's 'Equity Market Minute' 6/10/2020

Gina Martin Adams from Bloomberg Intelligence discusses the bleak analyst expectations for S&P 500 earnings, which might paradoxically benefit stocks. Analysts predict a significant drop in earnings for the second quarter, with stabilization seen recently. Historical data suggests potential growth, and a 5% growth model supports a fair value of 3300 for the S&P 500. If estimates improve, the index could reach new highs.

What is the expected decline in S&P 500 EPS for the second quarter according to analysts?

• 10%

• 25%

• 40%

• 50%

What could lead to the next upward movement for the S&P 500?

• Higher inflation rates

• Improvement in earnings revisions

• A decrease in interest rates

• Increased government spending

What is the average growth of the S&P 500 in the first 12 months after recession lows?

• 10%

• 5%

• 20%

• 15%

What growth rate did the model use to support the S&P 500's fair value?

• 7%

• 10%

• 5%

• 3%

What fair value does the 5% growth forecast support for the S&P 500?

• 3500

• 3300

• 3000

• 2800