Equity Reports

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Earnings Season: Q3 Will Be As Weak As Expected

Patrik Lang, CFA Head of Equity Strategy Research, Julius Baer | For Q2 consensus expects S&P 500 earnings to decline 43.9%, which would be the largest y/y earnings decline since Q4 2008 (-69%). For Q3 consensus expects earnings to decline by -25.4% and for Q4 by -12.8% followed by 28% earnings growth in FY 2021. Based on our macro models and historical post-recession earnings patterns, we see upside risk to consensus expectations for both H2 2020 and FY 2021.

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Leverage loans. The next trigger?

German Or US Bonds: Who Is Following Who?

Analysts at Julius Baer think it is “comforting” to see that the bond market is efficient. In other words, they say that for German bond investors it is basically the same whether they invest in negative- yielding German Bunds or buy US bonds and pay for the hedging of the currency risk.