- Low inflation and tons of liquidity will allow the economy to slowly recover but with a greater disparity between winning and losing sectors.
- Technology has performed strongly year-to-date with the Nasdaq up +14%. The Russell 2000 (small cap) is down -15% in the same period.
- 5 big stocks – Apple, MSFT, AMZN, GOOG, FB make up 44% of technology index Nasdaq 100 and 21.6% of S&P 500 index.
- S&P 500 earnings forecasts currently assume a V-shaped recovery
- ADP jobs report showed private sector rehired 2.4mm workers in June, many in the service sector.
- Revised from 2.8 million job losses to gain of 3.1 million in May.
- As economy reopens, workers are being rehired.
- Many businesses still not operating at full capacity so continued weakness is likely.
What are your thoughts on the resilience of the stock market and risks ahead?