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Data: FactSet; Chart: Axios Visuals

In addition to largely ignoring economic data, the stock market's rally is defying cratering earnings per share estimates.

By the numbers: During the first five months of 2020 the bottom-up earnings per share estimate for S&P 500 companies — an aggregation of the median 2020 EPS estimates for all the companies in the index from FactSet — has fallen by 28% (to $128.03 from $177.82).

  • That's the lowest EPS estimates have been in the history of FactSet's data, which goes back to 1992.
  • During the past five years, the average decline in the annual EPS estimate during the first five months of a year has been 1.3%, and for the past 20 years, the average decline for the first five months of a year has been 2.4%.

What's happening: "The market is broken," Joe Brusuelas, chief economist at RSM International, said in an interview with CNN Business.

  • "It no longer reflects a forward outlook that is truly aligned in the real economy," he said. "That's a problem because, at some point, the public will say these markets are rigged."

On the other side: Barry Knapp, managing partner at Ironsides Macroeconomics, argues that valuations are simply useless in the current climate.

  • “It’s the beginning of a new business cycle. You shouldn’t get all beared up, and you’re not supposed to focus on valuations," he told CNBC. "This is the early stage of the business cycle."

Go deeper: Pandemic and protests can't stop the stock market

Go deeper

S&P 500 closes at record high for first time since pandemic began

Source: FactSet; Chart: Axios Visuals

The S&P 500 closed at a new high on Tuesday for the first time since February, before the coronavirus pandemic was declared.

Why it matters: It’s among the fastest-ever recoveries on record and comes as millions of Americans remain out of work during one of the worst economic downturns in U.S. history.

Felix Salmon, author of Capital
Aug 19, 2020 - Economy & Business

The triumph of capital over labor

Illustration: Aïda Amer/Axios

Tuesday's stock market record proves the definitive triumph of capital over labor in the era of COVID-19.

Why it matters: The recession has caused the size of the American economic pie to shrink substantially. But the share of that pie going to capital rather than labor has continued to rise.

Erica Pandey, author of @Work
57 mins ago - Economy & Business

The winners and losers of the pandemic holiday season

Illustration: Sarah Grillo/Axios

The pandemic has upended Thanksgiving and the shopping season that the holiday kicks off, creating a new crop of economic winners and losers.

The big picture: Just as it has exacerbated inequality in every other facet of American life, the coronavirus pandemic is deepening inequities in the business world, with the biggest and most powerful companies rapidly outpacing the smaller players.