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Fed Liquidity, PE Ratios and the Economy – Entasis Newsletter 2Q2020

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Newsletter Summary

  • The impact of Fed liquidity on sentiment in the second quarter was staggering and it has opened some amazingly wide gaps among sub-asset classes. Our research work lists are full.
  • PE ratios tend to have a rather weak correlation to future stock prices over the short-term, but become a much more constructive tool to project return environments over longer periods.
  • While some economic data suggests a rebound is underway, analyst forecasts for Q2 economic growth range from -33% to -40%, which are numbers we never expected to see in our lifetimes.
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