Moment of truth for the markets

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Beginning Thursday April 15, the corporate earnings season in the United States will be particularly observed this year. We will know if the evolution of business corresponds to the strong recovery anticipated by euphoric stock markets since last October, or even since March 2020, already. The S & P500 index has posted 22 records since the start of the year, almost one every three sessions. The results published in the coming weeks will tell if this fever is justified.

This first season of results for 2021 takes place in a particular context. On the one hand, the equity markets very much anticipated a marked economic recovery. Valuation levels are very high, with a price / earnings (P / E) ratio of around 20 times for the global equity index, the MSCI World, well above the median of the past 15 years (from l ‘order of 15 times). In the United States, this ratio reached 22.4 for the S & P500 at 12 months, again a level well above the averages of the last 5 and 10 years (17.8 and 15.9 times respectively), according to a study by Factset analyzed by John Plassard, of Mirabaud, last week.