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Investor focus has landed squarely on the surge in new COVID-19 cases and its threat to economic reopenings, but there’s another possibility being ignored. According to Morgan Stanley equity strategist Mike Wilson, even though the market is expecting economic activity to decline, earnings could get a major boost.“Cautious investors may be overlooking the potential for operating leverage to fuel an earnings rebound... Aggressive cost-cutting in a downturn is what creates the powerful operating leverage when the economy recovers,” Wilson commented.While unemployment has skyrocketed during the coronavirus crisis, Wilson argues operating leverage was already dropping before the pandemic’s onset. “It’s also a classic feature of late-cycle economic expansions. My point is that many companies were already exhibiting negative operating leverage pre-COVID-19. This gives me confidence that Q2 will likely be the trough for earnings growth,” he explained.Bearing this in mind, some investors are on the hunt, looking to snap up compelling names...
The brand house, which has been selling off businesses already, is now considering a broader set of strategic options....
The Commercial Vehicle Safety Alliance’s Operation Safe Driver Week officially began today and will run through Saturday, July 18. ...
Yahoo Finance's On the Move panel discuss the latest headline making news stories.
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Tesla shares surged Monday past $1,700 on the speculation that it may be added to the S&P 500. With the company up over 200% in 2020, investors are unsure how much more the company can go. The Final Round panel breaks down the details. ...
