Here's why stock market investors are "too optimistic" about 2020 earnings and a recovery in 2021, according to strategists

In our call of the dayy, ING strategists said that investors could put too much weight on the recovery of 2021. Investors were ready to "watch" the slowdown in 2020, with profits of the S&P 500 falling 20% ​​over the market before a 25% recovery next year, they said.

The bank's research team, led by global market leader Chris Turner, said the consensus decline was 20% for US corporate profits. USA In 2020, he was "too optimistic".

ING international economist James Knightley sees a 7% contraction in US gross domestic product. Well below the consensus of -4%, the team said it would see the 2020 slowdown in profits of "dwarf" businesses from the financial crisis.

"Likewise, poor transparency of corporate profits, where even Amazon
AMZN
+ 1.15%

and apple
AAPL
+ 1.11%

they are fighting for advice: this suggests that investors will need strong compensation to hold stocks, "they said.

They noted that given the recent 35% rebound in lows and expanding price / earnings ratios, the 12-month S&P 500 results offered a recovery of less than 400 basis points on the end of the year. US Treasury market USA

"In times of uncertainty like these, higher profit expectations or lower valuations may be necessary to keep stock markets buoyant. We are wrong about them, ”they said.

Markets

After closing 455 points on Friday, the Dow Jones Industrial Average
DJIA
-0.24%

fell 0.3% at the start of the session Monday. The S&P 500
SPX
+ 0.12%

it rose 0.1%, while the Nasdaq
COMP,
+ 0.70%

increased by 0.7%. European stocks rose Monday morning as investors became optimistic about easing blocking restrictions around the world before falling back. Pan-European Stoxx 600
SXXP
-0.39%

decreased by 0.6%. Asian markets
ADOW,
+ 0.82%

It rose overnight as investors looked beyond the U.S. employment data and toward a global recovery.

The buzz

Former President Barack Obama has described President Donald Trump's management of the coronavirus pandemic as "an utter chaotic disaster," according to a leaked record obtained by Yahoo News.

The head of the Federal Reserve, Neel Kashkari, said that the US economy. USA He is said to have a "slow and more gradual recovery" from the coronavirus after White House officials were optimistic about recovery recovery.

Prime Minister Boris Johnson told those who could not work from home to return to work, like the United Kingdom. define the first steps to ease their blocking measures.

Low-cost EasyJet airline
EZJ,
-5.90%

You may have to raise up to £ 1 billion, according to Citi analysts, after the British government said it was trying to impose a 14-day quarantine on people entering the country.

Shanghai Disneyl and reopened on Monday for the first time since January 25, with strict coronavirus controls.