Market Commentary

May 2020

COVID-19 Related Disaster

Sudden Impact
Payroll employment plunged 21m
Household employment dropped 22m Unemployment rate surged to 14.7%
Participation rate declined 4%
Consumer Comfort Index fell to 36.9

Massive Global Stimulus

Unprecedented & Coordinated
QE+ efforts from our Fed.
CARES Act & follow‐on PPP funding.
Over the past 9 months, worldwide there have been 401 stimulus announcements and 183 central bank rate cuts.

Re-opening has Begun

June 1 seems like the target date
Florida, Georgia & Texas have begun.
Many medical offices (non‐COVID‐19) opened on May 4.
Retail is set for May 20 thru May 29.
All businesses are focused on adopting new COVID‐19 practices.


Outlook: 2020, 2021
  • Disruption in consumer & business activity leads to 2020 earnings possibly down ~20%.
  • Path (not a sudden arrival) to normalcy could lead to earnings rebound in 2021, up ~20%.


It's All About the Time Period
  • S&P 500 P/E multiples based on: 

    • Est. 2020 EPS:  22.7x
    • Est. 2021 EPS:   17.9x
    • Est. 2022 EPS:  15.7x


Market is Relatively Optimistic
  • S&P 500 up 31% since 3/23/20 low
  • Near‐term variable: virus data in staggered re‐opening of economy
  • Beyond: improvements in employment data, GDP, corporate earnings, and stock prices
*Data as of 5/8/2020

Additional Information/Articles of Interest

This material is for your general information. It does not take into account the particular investment objectives, financial situation, or needs of individual clients. This material is based upon information obtained from various sources that Community Trust and Investment Company believes to be reliable, but we make no representation or warranty with respect to the accuracy or completeness of such information. Views expressed herein are current only as of the date indicated, and are subject to change without notice. Forecasts may not be realized due to a variety of factors, including changes in economic growth, corporate profitability, geopolitical conditions and inflation.