Relying on this earnings season that’s coming to an end in a few weeks is a big mistake. The reason is because May and June numbers were pushed higher by reopenings and the incorrect belief of consumers that the worst of the coronavirus had passed.
July was when everything changed in the U.S. as coronavirus cases started surging higher across the country and the reopening move went off the rails.
What this means is that if, in August, you are looking at new quarterly earnings reports that ended on June 30, 2020, as a sign the economy is well on the mend to improving from the darkest days of the pandemic in March, you would be wrong to do that.
The resurgence of the pandemic couldn’t have come at a worse time in terms of quarterly reports. Millions of investors are still under the impression that the economy is getting much stronger now because of just released quarterlies ending June 30, 2020. However, the true picture of what is NOW going on is not included in these reports.
CNBC had Cameron Mitchell on and he confirmed that the U.S. economy is currently in much worse off shape now than it was at the end of June.
Mitchell compares the pandemic’s impact on the U.S. economy as a hurricane and the first wall hit in March – April. In May and June, we were in the eye of the hurricane which was calm and sunny. Then in July and August, the second wall of the hurricane hit.
It would be completely incorrect for the weather service to take a weather reading in the eye of the storm and then tell everyone the forecast is for calm and sunny and no showers, yet that’s exactly what some investors are doing this earnings season.
Cameron Mitchell is the founder and CEO of Cameron Mitchell Restaurants, which operates over 30 restaurants across 12 states. He joins “Squawk Box” to discuss how the industry is fairing under the stress of the coronavirus pandemic.