What's going on?

US stocks did more than just snatch victory from the jaws of defeat last quarter: they ended up bringing home their best quarterly performance since the end of 1998.

What does this mean?

Ever since March�s �bear market� selloff, investors seem to have been encouraged by the promise that major central banks and governments would do whatever they could to prop up the economy and, by extension, markets. And more recently, the reopening of businesses seems to have buoyed investors even more � despite the ongoing pandemic.

This much was clear from the 20% rise in the key US stock market index, the S&P 500, last quarter. That�s its biggest quarterly increase in more than 20 years, and brings its annual performance to �just� a 4% decline (tweet this). Still, it�s no Nasdaq Composite: the tech-focused index has risen 12% this year � including a 31% jump last quarter.

Why should I care?

For markets: Riddle America.

This month kicks off with a host of second–quarter company updates. Analysts are expecting profits to be 44% lower on average than the same time last year � partly due to a 151% drop for energy companies. But it�s not all bad: they think utilities � which, like energy companies, comprise 3% of the market � won�t see their profits drop at all. Of course, with almost 200 companies having abandoned forecasts altogether, it�s still a bit of a puzzle: things could be much worse than expected, or � if Wednesday�s stock market rise means anything � even a bit better.

The bigger picture: A campaign in the neck.

Coronavirus has made it tricky to estimate companies� fortunes this year, sure, but analysts reckon the upcoming US presidential election has made forecasting almost pointless anyway. They�re concerned new policies could rattle healthcare or financial services companies. So while Bank of America thinks US stocks could fall another 7% this year, others have ditched their forecasts altogether.