Welcome to Thoughts in the Market.

I'm Mike Wilson, Chief Investment Officer and Chief U.S. Equity Strategies for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about

the latest trends in a financial marketplace.

It's Monday, February 22nd, at 11.30 a.m. in New York, so let's get after it.

With February now almost over, things are really looking up.

First, fourth quarter earnings proved to be terrific for most companies.

With 419 companies in the S&P 500 reporting so far, earnings for share have come an 18% higher

than the consensus estimate.

Sales have been just 3% higher on average, suggesting our operating leverage theme is really

playing out.

More specifically, unemployment remains high, but the government's support to help out

means many companies have not seen a precipitous fall on revenue.

Instead, fourth quarter sales actually grew 1% near every year.

When combined with the lower unemployment costs and other operating expenses, profit margins

have moved to near all-time highs.

In short, the recession is over for corporate profits.

Second, after a slow start, the vaccination process has picked up nicely.

In addition, there is some evidence that the first shot of the vaccine can provide 75%

effectiveness against symptoms of any kind, meanwhile, new cases are falling more rapidly

than expected, and several leading health experts are even saying we may achieve herd immunity

as early as April.

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