J.P. Morgan Asset Management’s Guide to the Markets compiles macro, valuation, and market cycle data to frame how investors should interpret the post-COVID rebound and elevated equity valuations. It highlights a sharp earnings collapse of roughly -33% alongside rapid market recovery, raising questions about sustainability and whether valuation expansion has outpaced fundamentals.
Guide To The Markets – US Q4 2020
J.P. Morgan Asset Management
Research
79 Pages
Key Takeaways
Earnings Collapse Reality: S&P 500 earnings fell about -33% in 2Q20, far below the long-term average growth rate near 7.5%, underscoring the scale of the pandemic shock.
Valuation Expansion Risk: Forward P/E ratios climbed above 21x versus a 20-year average near 16x, implying valuations are roughly 130%–140% of historical norms.
Uneven Market Recovery: Growth stocks rebounded as much as 66% from March 2020 lows, significantly outperforming value segments that lagged by over 20 percentage points.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
