Thursday, April 16, 2020

Three card monte Thursday!

For the 5th consecutive Thursday the United States reported absolutely catastrophic initial jobless claims. This time 5.3 million fellow Americans lost their jobs - just 7.5 times the previous all-time record from the time B.C. (before COVID19).

So as I mentioned earlier in the week -

Total jobs created in the US in the past 12 years were roughly 22 million. 

Total jobs lost in the last 4 weeks were roughly 22 million.

There is no sugar coating this data.  Ignore the stock market (I'll get to that in a second) unemployment is going to be north of 15% and maybe approach 20%.  No one can appreciate how historically bad things are going to get. 

This visualization may help. The white line is cumulative jobs created and  the green line is initial jobless claims.
Image

However, the stock market show must go on so for the third consecutive Thursday Washington insiders have played a shell game around the release of terrible jobs numbers.  They've managed to snatch the microphone and deliver their own message by shouting louder than the headline jobless numbers.

* Three weeks ago Fed Chairman Powell did a live TV interview just before data was released. 

* Two weeks ago the Fed a new $2.3 trillion Wall Street bailout just as the jobs data was released.

* Today the White House hinted all day about a potential break through in treatment and opening up for business. 

So, Washington is planning to open up but Governors around the US keep extending opening dates.  Remember, this was the problem with our shutdown, we staggered the shutdown and it caused more problems than if we'd gone with a national shutdown as soon as the first outbreak hit Washington State. Staggering the open will eventually cause the same sort of confusion.

However, the entire stock market is soaring tonight not on news from the Stock Pumper in Chief but because of a potential treatment....well, not really but...

So, after the market close statnews reported that EARLY results of a study of drug made by Gilead Sciences in a 2400 person study showed promise in SOME percentage of 125 people.  So, there was a potential benefit for 5% of people in a non-randomized trial in China.  WE'RE SAVED!!!

Interestingly, Gilead has not commented. It doesn't sound like this trial was conducted according to normal research standards and interestingly, Gilead has said they aren't interested in building a business around this drug.  Gilead's stock has soared tonight taking the rest of the market along for the ride. If things opened where they are trading overnight we would only be down 12% from all-time record highs as the globe faces the worst economic crisis of our lifetimes.

Repeat after me: THE STOCK MARKET IS NOT THE ECONOMY.

Unfortunately, people that aren't very bright like to view the daily stock market moves as an indicator of economic success.  Maybe some day that will change but that day is not today.

If the stock market opens at these levels it will be a very interesting day tomorrow because that will represent a 62% retracement of the losses and 2905-2935 is the level where all of the programs will probably start selling. Hard to say but it should be a fun day for the computers to do battle (humans need not apply).
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Daily Dose of Humor:

via @Crockettforreal
"Being a parent is literally just changing the toilet paper roll and cleaning up messes that don’t belong to you repeatedly until you die"

via @FunnyBison
"I’ve added a new weekday. I call it “Bingeday.” You can do whatever you want on Bingeday.

Also, I’ve renamed the other days to Bingeday."
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Cheers!

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