Jefferies raises S&P 500 forecast on expectations for greatest profit turnaround in history

A stock trader wearing a mask walks near social distancing signs the day a new IPO is launched at the New York Stock Exchange as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on August 27, 2020 in New York City. The fourth phase allows outdoor arts and entertainment, sporting events without fans and media production.

Alexi Rosenfeld | Getty Images

(This story is for CNBC Pro subscribers only).

The third quarter earnings season is poised to show the greatest turnaround in corporate profits on record, Jefferies said in a note to clients Tuesday.

The reports for first full quarter since the most stringent pandemic restrictions have started off strong, with better-than-expected results for JPMorgan, Johnson & Johnson and BlackRock. That follows a second quarter where earnings for the S&P 500 dropped 31.7% compared with the same period in 2019.

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