Market outlook
The situation is simple: Q1 season has come with 200 publications this week. If more than 60% can beat estimates, it will be a bullish trigger and I expect a good run of the stock market off season. In short, if in the middle of may, SPX is still above march lows, with a a reasonnable beat rate for Q1’s (let’s say above 60%), we can expect a bullish run for a few weeks…
Right now, my odds favour this scenario even if I stay deeply pessimistic on the longer term, before end of year… just one number P/E ratio for SPX is above 20 and the fair value of the index for a P/E of 15 would be around 950 pts!
But, let’s take events one after the others…