The Mother Of All Joy Rides

Yes, it surely is a joy ride. Back on March 24 the total market cap of global equities dipped to $61.6 trillion on the logical fear that sweeping and unprecedented economic lockdowns in response to the Covid pandemic would wreak havoc with economic growth, jobs, incomes and profits.

These fears were correct. Instead of global GDP growth of +4.8% expected last January, the latest survey by PwC projects a 4.0% decline, representing the largest annual drop in modern history; and even that is flattered by a projected 2% gain for the Red Ponzi.

Apart from the dubious GDP count for the latter, the outlook for the rest of the planet is pretty grim:

2020 Real GDP Growth Rate:

  • Spain: (11.9%);
  • United Kingdom: (11.3%);
  • India: (9.6%);
  • France: (9.3%);
  • Mexico: (9.3%);
  • Italy: (9.1%);
  • South Africa: (8.6%);
  • Eurozone: (7.7%);
  • Germany: (5.5%);
  • Canada: (5.5%);
  • Netherlands: (4.8%);
  • Total World: (4.0%);
  • United States: (3.7%).

Likewise, the profit picture has cratered like rarely before. Last year at this time the outlook for S&P 500 profits during 2020 was $180 per share, which since has dropped by 33% to $120 per share. And that’s the Wall Street ex-items estimate, which makes $24 per share of bad stuff disappear from the current analyst consensus of just $93 per share on a GAAP basis.



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