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Published: April 13, 2020 at 10:20 a.m. ET, By Barbara Kollmeyer<\/p>\n
With the long Easter weekend behind us, stocks are pointing to a lower start for Monday as coronavirus fallout swings into focus.<\/p>\n
A big question to start the week is whether investors have gotten ahead of themselves, after the S&P 500 managed its best weekly gain in 45 years<\/a> as the Federal Reserve threw more money at the economy. Banks may have something to say about that Tuesday as they kick off earnings season, shedding light on the damage that\u2019s been done so far by the virus.<\/p>\n Our call of the day, from a team of Goldman Sachs strategists led by David Kostin, says the worst of the market rout is behind us. A \u201cprevious near-term downside of 2000 [for the S&P 500] is no longer likely. Our year-end S&P 500 target remains 3000 (+8%),\u201d says the team in a note to clients on Monday.<\/p>\n Why? \u201cThe combination of unprecedented policy support and a flattening viral curve have dramatically reduced downside risk for the U.S. economy and financial markets and lifted the S&P 500 out of bear market territory,\u201d said Kostin, whose gloomy stock prediction from last month came the day before a complete market meltdown<\/a>.<\/p>\n \u201cIf the U.S. does not experience a second surge in infections after the economy reopens, the \u2018do whatever it takes\u2019 stance of policy makers means the equity market is unlikely to make new lows,\u201d said Kostin.<\/p>\n They also argue, as their chart shows, bear markets usually bottom before economic data\u2019s nadir:<\/p>\n And Goldman is in the camp that believes bleak quarterly earnings to come matter less than earnings per share for 2021. Still, it\u2019s a bit of marked confidence at a time of so many unknowns and no global light switch to turn the world\u2019s economies back on.<\/p>\n Here’s JonesTrading\u2019s chief market strategist Michael O\u2019Rourke with a comment to balance out all that positivity:<\/p>\n \u201cAlthough the pandemic progress of the past week and the Fed programs are not exactly one-off events, they won\u2019t be repeating on a daily basis as disappointing earnings and economic data will be for the next couple of months. No matter how active the Federal Reserve is, this is not a tape to chase higher.\u201d<\/p>\n The market<\/strong><\/p>\n The Dow US:DJIA , S&P US:SPX and Nasdaq US:COMP are in the red, while oil prices US:CL00 are back in the black after Sunday\u2019s production-cut deal. European markets are closed for an extended Easter break. The Nikkei JP:NIK and KOSPI KR:180721, which led a mostly down day in Asia.<\/p>\n The chart<\/strong><\/p>\n Coronavirus-stimulus won\u2019t be enough to repair a damaged market, says Octavio Costa, Crescat Capital\u2019s portfolio manager. Here\u2019s his chart:<\/p>\n Just math.<\/p>\n Global stocks lost about $20T in value so far.<\/p>\n The real damage, including all other assets, is probably closer to $50T.<\/p>\n Add a $13T dollar shortage problem globally.<\/p>\n You think $6T of money printing & broke governments will fix this?<\/p>\n I will take the other side. pic.twitter.com\/EIcwms8o5V<\/a><\/p>\n — Otavio (Tavi) Costa (@TaviCosta) April 12, 2020<\/a><\/p><\/blockquote>\n![\"S&P](\"\/blog\/wp-content\/uploads\/2020\/04\/MW-IE259_gs_130_20200413065301_NS-1200x818.jpg\")
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