: Even if they don’t anticipate another sharp plunge, most observers hardly expect the market to soar, either. Investors who are wading back into the water are getting confusing signals: Quarterly earnings are shrinking and corporate reports provide few clues about the future, while rising stock prices are hard to square with the mounting toll of an unprecedented economic collapse.
If there’s one thing analysts and investors agree on, it’s that neither the optimists nor the pessimists are firmly in control of the market’s direction at the moment. That’s because the path of the coronavirus crisis is impossible to predict. In recent days, though, stocks have settled into a middle zone: far from the low levels that clearly signaled a bear market, but not conclusively blossoming into a new bull market either.“You could almost argue that we’re in a bull market and a bear market at the same time,” said Eddie Perkin, the chief equity investment officer at Eaton Vance, a Boston-based money manager.While investors might be tempted to buy stocks now, before the market starts surging higher, many of them are torn.
When the market collapsed last month, P/E ratio plummeted. But it began rising in recent weeks, and could climb further if the market merely remains steady.The reason: Public companies are beginning to report their first quarter results. Many will report drastically reduced earnings, with profit expectations for the rest of the year looking grim.
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