The economic calendar was light this week and many companies have entered a quiet period ahead of second quarter earnings season which will unofficially kick off next week. Second quarter earnings results are expected to be ugly, with aggregate earnings among S&P 500 companies expected to decline roughly 40% year-over-year based on consensus estimates. The energy, consumer discretionary, and industrial sectors are likely to experience the largest year-over-year earnings declines in aggregate. Many companies scrapped their full year earnings guidance earlier this year due to uncertainty related to the pandemic. We are not expecting many companies to initiate new detailed earnings guidance, given that much of that uncertainty remains. Nevertheless, investors will be looking for evidence of a pick-up in demand and focused on management teams’ strategic plans for the balance of the year. While weak second quarter earnings are already baked in to expectations, market participants are expecting a meaningful pick-up in economic activity and corporate earnings in the second half of this year.

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