— This is the script of CNBC's news report for China's CCTV on June 5, 2020, Friday.
A total of 722 bankruptcy-court filings were filed in May, up 48% from a year earlier and 28% from April, according to Epiq Global, a legal services firm.
High-profile US companies including JC Penny Neiman Marcus and JCrew filed for bankruptcy last month.
Bankruptcies in the US were flat in May compared with May 2011 when US economy had not yet fully out of the subprime mortgage crisis.
In recent years, the US economy has continued to expand, and bankruptcy filings have declined significantly. The recent surge has led some legal experts to call on Congress to increase the number of bankruptcy judges to ease potential job stress。
The newly released data arguably further underscores the intense pressure on American businesses as the epidemic hits. In addition to surging production, U.S. corporate profits have been squeezed by the outbreak.
Recent Commerce Department data showed corporate profits fell 13.9% in the first quarter, the biggest drop since the 2008 crisis. The second quarter is expected to be even worse after a longer lockdown. We have noted that many kinds of economic data notched a record decline recently.
But stocks kept rising, with the S&P 500 already on track for its best 50-day rally in history, up nearly 40 per cent.
Recently, there has been a lot of talk in the market about whether the U.S. stock market has lost touch with reality? For some investors, the stock market's rise has a logic. On the one hand, investors are always looking to the future rather than the present.
And in the United States, economic activity is expected to pick up. Second, stocks have a history of rising in years of mass protests and pandemics. 1968, for example, The fact that the Federal Reserve and the U.S. government are providing a lot of money to prop up the market is a positive factor, still, some risks are emerging. Jeremy Grantham, a prominent valuation investor, warns that the market has been lost in one-sided optimism. His investment firm, GMO, has slashed its global equity holdings to near levels seen during the financial crisis. Some analysts see overvaluation, the U.S. election and a potentially slow economic recovery as risk factors for U.S. stocks.
RBC Capital Markets' Head of U.S. Equity Strategy
I think the rise has been pretty logical, but it is pretty rich right now, we think we are trading about 25 times of earning this year compared 21 times last year, you had valuation opportunity, it's dissipated , I think markets are going to have a tough time.
We will keep an eye on the US economy development and US stock market.