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The pandemic has made profit and cash flow estimates nearly impossible to pinpoint with any confidence. The resulting information vacuum has been filled with a dizzying variety of credible strategist forecasts.

Morgan Stanley’s U.S. equity strategist Michael Wilson is extremely bullish. In a Friday research report he wrote, “Bear markets end with recessions, they don’t begin with them, making the risk/reward more attractive today than it’s been in years.”

Mr. Wilson trusts that U.S. government fiscal measures – the scale of public spending will create an estimated fiscal deficit of 18 per cent of GDP this year, the biggest since World War II – will minimize the market damage arising from a recession. He believes the worst of the equity market selling is behind us.

This bullish view is not even shared throughout Morgan Stanley, as I noted in one of last week’s newsletters. Mr. Wilson’s colleague Serena Tang wrote a report arguing that a slow, grinding market recovery was in store, not a quick lucrative snapback.

Citi strategists are almost universally pessimistic. Global macro strategist Jeremy Hale published a research report called “Going Back to Risk Off” where he projected that the S&P 500 would re-test the lows of March 23, around 13 per cent lower than Monday’s opening level.

Mr. Hale believes that “Growth and [earnings] expectations still need to be revised lower, quicker, and until that happens, negative surprises are likely.”

Savita Subramanian, quantitative strategist at B of A Securities (formerly Bank of America Merrill Lynch), has been my go-to source for earnings forecasting for years. Late last week, Ms. Subramanian cut her expectations for corporate profits, ending up with a forecast in the ‘kinda ok’ range – a 12-month target of 2600 for the S&P 500, not far from where the index stood on Monday.

Ms. Subramanian began the research report on a negative note, writing “It could take multiple years to recover lost corporate earnings,” but ended with happy thoughts for buy and hold investors: “Panic selling is a recipe for losing money: the best days typically follow the worst days, and since the 1930s, if an investor sat out the 10 best days per decade, the returns would be just 91% vs. 14,962% returns since then.”

I don’t have a firm opinion bullish or otherwise on global equity markets at this point. On one hand, investors as a group seem too anxious to jump back in and add portfolio risk – this confidence is a negative sentiment indicator for markets. I’m also worried about the credit fallout, the volume of defaults, small business bankruptcies and corporate debt downgrades, arising from the rapid economic halt.

But Mr. Wilson’s points are well taken. A lot of market damage has been done, central banks are aggressively supporting markets and businesses, and maybe the worst is behind us.

Overall, the main feeling I get from the wide variance in forecasts is that they’re all guessing. I mean, even more than usual. There’s no escaping the fact that the pandemic has created a degree of economic uncertainty that might be unprecedented for investors and more information is needed before anyone becomes legitimately certain about anything.

-- Scott Barlow, Globe and Mail market strategist

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The Rundown

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More Globe Investor coverage

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Compiled by Globe Investor Staff