We just closed the books on June and the second quarter, and it to say it was very different than the March quarter is, as they say, quite an understatement.
While all the major U.S. market indexes fell double-digits during the first three months of 2020 as the global Covid-19 pandemic took hold, we witnessed one of the most pronounced rebounds in recent memory during the second quarter. While the S&P 500 finished the March quarter down 20%, its June quarter performance narrowed the gap to a decline of 4% for the first half of 2020. The Dow Jones industrial average and the small-cap heavy Russell 2000 made similar strides, leaving them down 9.6% and 13.6% after the first two quarters of 2020. By comparison, the Real Money Post Industrial Average (RMPIA) fell just 12.1% during the March quarter and rebounded more than 22% in the June quarter to finish up 7.8% at the 2020 half mark.
In short, RMPIA's track record of outperformance continued during the global pandemic outbreak.
That S&P-beating performance was fueled by 16 of RMPIA's constituents, besting that market barometer, led by the 82% move in PayPal Holdings (PYPL) , and the 40% plus moves in both Apple (AAPL) and Amazon (AMZN) . All told, only two RMPIA constituents -- Biogen (BIIB) and Walgreens Boots Alliance (WBA) -- finished the quarter in the red. For the first six months of 2020, the RMPIA outperformed the S&P 500 by almost 12 percentage points, as more than half of its constituents delivered positive performance during the period. Leading the charge was PayPal, Regeneron Pharmaceuticals (REGN) , Amazon, Adobe (ADBE) and Apple.
Those pronounced gains more than offset the declines registered during the first six months of 2020 with Walgreens Boots Alliance, Starbucks (SBUX) , Medtronic (MDT) , CVS Health (CVS) , and Booking Holdings (BKNG) .
As we closed the books on June and the second quarter, we recently kicked off the first month in the current quarter on a positive note, despite the increasing coronavirus case count that is leading several states to roll back loosened restrictions and other guidelines. Offsetting those Covid-19 headlines, last week brought several pieces of positive economic data in the form of the June Institute for Supply Management's Manufacturing Index and the June employment report. The picture painted by both of those reports, along with the June ISM Services Index, is one of the domestic economy getting back to work. That echoes comments made by a growing number of companies that, in adapting to the pandemic and its restrictions have re-opened, bringing more back to work.
The June quarter earnings season will shortly be upon us, and we'll likely see a pronounced uptick the 2020 U.S. presidential campaign cycle. In addition to keeping a watchful eye on U.S.-China relations, we'll expect to see the incoming data starting to show the impact of the renewed surge in U.S. Covid-19 cases that is building a renewed headwind to economic growth in the current quarter as several states tighten coronavirus-related restrictions.
Recently, Goldman Sachs (GS) also cut its gross domestic product forecast for the current quarter to up 25% from 33%, given the combination of tighter state restrictions and voluntary social distancing following the dramatic resurgence of the outbreak. Per Goldman, the "healthy rebound in consumer spending seen since mid-April will likely stall in July and August."
But the firm suspects the recovery in manufacturing and construction should be largely unaffected. We'd note that the revised September quarter GDP figure compares to the New York Fed's Nowcasting GDP forecast of 10.4% for the quarter and a decline of 15.09% for the recently completed June quarter.
For the June 2020 quarter, consensus earnings per share estimates call for a 43.8% drop in the S&P 500, and, even though S&P 500 EPS are expected to bounce back in the second half of the year, EPS expectations for the full year are down some 22% vs. 2019. While the outlook for 2021 calls for a continued rebound, the reality is EPS growth for the S&P 500 over the 2019-2021 period is all of 0.2%.
Against the backdrop of record-making surges in the major stock market indices during the June quarter, that even led the CNN Money Fear & Greed Index to slip back into Neutral from Greed just a month ago, we continue to see the June quarter earnings season setting the direction for the stock market's next move. As we wait for that onslaught to begin, we'll look to this week's earnings reports, which includes RMPIA constituent Walgreens Boots Alliance, as an indication of what we the coming weeks might bring.