Credit Suisse: caution
Garthwaite expects near-term consolidation in equities. Most important reasons:

1) to some extent, credit leads equity and we no longer find high-yield spreads clearly attractive

2) market performance is in line with earnings revisions (which look set to deteriorate) – we take our European 2020 EPS growth forecast to -…[Read more]

Citigroup Q&A:
1. Is This Bear Market Done? — Not yet. The central bank bid has won out in recent

weeks, but we suspect that profit concerns have not yet been seen off

completely.

2. Can Valuations Help? — Not really. CAPEs smooth out extreme EPS volatility, but they have been very inconsistent in calling the bottom of previous bear mar…[Read more]

We are really living through full stock market cycles in the matter of weeks. MS Equity Strategy – that were rather early in calling out that the initial “bounce” was more than just a bear market rally – are now saying that the risk of a correction has increased. If it is a “correction” and not a “resumption” of the bear trend – the rally was a…[Read more]

Sanford Bernstein looks at possible explanations for the market recovery.

1. Investors could be looking to the end of lockdown as we pass the point of maximum uncertainty about the economic impact. The sobering point is that in none of these scenarios can the market be said to be cheap in any sense (see table below).

2. Another possible…[Read more]

Reasons we are up according to Goldman Sachs:

1, liquidity stress has eased, lower cross asset volatility, especially rates vol

2, more constructive shape of the recovery, less left tails, long dated skew is down, div futures we have been outlining over past weeks have all rebounded big

3, sentiment has improved from extremely depressed levels,…[Read more]

Goldman Sachs: If the month of April were to end on 4/15, US equities on the GS Prime book would have seen the largest monthly $ net selling since Aug ’16 (-1.6 SDs vs. the past five years). All 11 US sectors have been net sold MTD, led by Cyclical sectors