Huge Unemployment Numbers Yet The Market Is Up?!

fmdog44

fmdog44

Well-known Member
Location
Houston, Texas
3.28 million new jobs lost yet the Dow is up over 800 at 9:00 AM today. This is contrary to the concept of the market not liking poor jobs numbers. Not only is the latest number bad it is about six times the worst job loss record in American history. When I saw the Dow this morning expecting it to be down substantially all I could do is scratch my head. The news overall could not be worse than we are seeing lately yet we see three days of solid gains. Granted the Dow is still down 6,000+/- but after the 3.3 million jobs lost and the reaction I see this morning is puzzling to say the least.
 

fmdog44 said:
3.28 million new jobs lost yet the Dow is up over 800 at 9:00 AM today. This is contrary to the concept of the market not liking poor jobs numbers. Not only is the latest number bad it is about six times the worst job loss record in American history. When I saw the Dow this morning expecting it to be down substantially all I could do is scratch my head. The news overall could not be worse than we are seeing lately yet we see three days of solid gains. Granted the Dow is still down 6,000+/- but after the 3.3 million jobs lost and the reaction I see this morning is puzzling to say the least.
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... just people being hopeful for the future
 

Just wait until the unemployment numbers start reaching double digits.....which could very well happen in the next month, or two. This government "stimulus" is not going to help much if businesses have to continue being shut down well into Summer. The markets are in "correction' territory now, and could easily slip into "depression" mode if there isn't progress in slowing this epidemic....and soon.
 
Don M. said:
Just wait until the unemployment numbers start reaching double digits.....which could very well happen in the next month, or two. This government "stimulus" is not going to help much if businesses have to continue being shut down well into Summer. The markets are in "correction' territory now, and could easily slip into "depression" mode if there isn't progress in slowing this epidemic....and soon.
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The 3.2 million number is horrible, for sure. But it reflects the impact of a one-time event. Everybody who works in a restaurant or on a cruise line or in a non-food retail store is out of work, all at once. That's why the stimulus is so important.

But seriously, don't you think they will all be back at work in say, six months? This is not a structural problem like the 2008 crash. We get knocked down, we get up again.
 
Actually, I will make an exception for cruise ships. I don't think anyone is going on cruises for a while. But people will eat in restaurants again, as soon as they re-open.
 
Not sure this has any bearing, maybe only as a factor, as this certainly is an unprecedented event, but still, a lot can be learned from past events.
If you look back at history, the average age of the world's great civilizations has been two hundred years. Probably has nothing to do with the virus but these past nations have gone throught he following sequence:
bondage to spiritual faith,
spiritual faith to great courage
courage to liberty
liberty to abundance
abundance to selfishness
selfishness to complacency
complacency to apathy
apathy to dependency
dependency back to bondage.
This is only my opinion, but I think there will come a day when the American government will have no money to hold up to the people.
 
This is much different than before. Unemployment has already been extended an additional four months if needed AND, each unemployed person will receive an additional $600 on top of what his/her state will pay in UC benefits. AND ALSO, these layoffs are temporary!! Here in PA, the most that an unemployed person can make from UC benefits is $573, plus another $600 from a gov't handout equals $1173.00. Not to shabby for anyone being able to say home.
 
>>AND ALSO, these layoffs are temporary!! >>

Sorry, that's not true here in Northern CA. In the hospitality industry, the majority of layoffs have been permanent. Business owners "hope" to bring back their previous staff - assuming they're still around.

Also, please remember that unemployment benefits are taxable income. Different states have individual ratios for determining amount of unemployment benefits: it can range from a mere 20% of salary to 50% of salary.

The extra $600/week added to unemployment benefits ends after 13 weeks.
 
Lethe200 said:
>>AND ALSO, these layoffs are temporary!! >>

Sorry, that's not true here in Northern CA. In the hospitality industry, the majority of layoffs have been permanent. Business owners "hope" to bring back their previous staff - assuming they're still around.

Also, please remember that unemployment benefits are taxable income. Different states have individual ratios for determining amount of unemployment benefits: it can range from a mere 20% of salary to 50% of salary.

The extra $600/week added to unemployment benefits ends after 13 weeks.
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There are always exceptions. In this case, the majority of layoffs are temporary and one reason being so many small businesses having to close. The stimulus bill adds 4 months to unemployment if necessary. Of course it’s taxable; it’s income. No difference than Social Security.

The way I understood the bill also is that small businesses that suffered losses, which probably is all of them, all they have to do is fill out the paperwork to get the loan and after they can prove their losses, the loan is forgiven. IOW, free money.

This stimulus package, although necessary, is another huge amount of money that puts the U.S. in further debt. I’m not sure that we needed so much. Some of what is in the stimulus package has nothing to do with the virus. For example: giving $50mil to the Kennedy Center.
 
What many individual investors are also forgetting that day trading stock held less than a year is taxed at regular income, not the lower capital gains rate. I The problem with the market now is the techies are doing what a slew of individual traders did a couple of decades go meaning one has to predict what the computerized trading is going to do. Which means it's very easy not to be quick enough to buy or sell to one's benefit. In the meantime the computers will keep a stock trending up or down for their benefit.

I noticed the banking stocks have had a run. I guess that's low interest rates but without people working and depositing they also lost cash flow. I saw one bank stock double in days and the latest news on thems is that they are delaying reporting and dividend payments yet the stock goes up???
 
mathjak107 said:
analysts were predicting up to 4 million , so things came in less bad then the markets priced for---at the moment
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Those that predicted the job loss numbers I listened to made no prediction of hat actually took place. In fact most concurred we would see a drop if not worse. Water under the bridge I just hope it continues per the stimulation incentives. To quote James Stewart in "It's A Wonderful Life", "Get me back Harold! Get me back!"
 
oldman said:
There are always exceptions. In this case, the majority of layoffs are temporary and one reason being so many small businesses having to close. The stimulus bill adds 4 months to unemployment if necessary. Of course it’s taxable; it’s income. No difference than Social Security.

The way I understood the bill also is that small businesses that suffered losses, which probably is all of them, all they have to do is fill out the paperwork to get the loan and after they can prove their losses, the loan is forgiven. IOW, free money.

This stimulus package, although necessary, is another huge amount of money that puts the U.S. in further debt. I’m not sure that we needed so much. Some of what is in the stimulus package has nothing to do with the virus. For example: giving $50mil to the Kennedy Center.
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I think a lot of it depends on the definition of "small business." We have a lot of very small businesses here, such as restaurants, hair dressers, nail salons, veterinarians, for example, that are not going to weather even the interim between being ordered to close (or having business fall off drastically) and the time they can get the aid. By the time they can get any aid, they will have lost their leases, their customers and employees may have gone elsewhere, etc.

And, call me cynical, but I do not believe any aid from the government will be easy to navigate, and I doubt that said "paperwork" will be easy, either, especially not for mom and pop type businesses. Already here we are seeing many of them being closed forever. How many months of rent is said free money going to pay for on a small business which has been shuttered?
 
The stock market is up because investors and corporations believe the US federal government will pump endless trillions into propping it up, despite the economic disaster it will eventually cause.

Pipers do need to be paid eventually, but the old men running the federal show figure they'll be out of office or dead by the time the tab comes due.

Question - why is the US government bailing out the cruise ship industry. Very few (if any) of their ships are registered in the US and nearly all shipboard employees are not US citizens. Yes, there are some corporate offices stateside, but not enough to warrant a bailout.

It's all about the wealthy taking care of their and their buddies' portfolios, my friends.
 
the job report was looked at being so horrible by the markets thinking , that most who wanted to sell would have sold on the news . so it would filter out a lot of selling .... markets never are logical ....

look at market gains for years we are coming out of downturns when corporate profits suck .... 2018 had record profits , markets were down ....

2019 had profits less than 2018 yet markets soared ....

there are endless academic studies , the most famous being in the now almost bible like book a random walk down wall street that did endless numbers crunching finding market returns are quite disconnected from earnings .

in fact earnings can be higher then expected but if revenue is off , the stock can get beat up . as well as overall gains can be lower then when the same stocks come out of recession and have poor earnings .

so trying to equate markets to what we think or see can be very illogical . ( despite what some here think , who believe their own bull as fact )

in the book a random walk down wall street 548 NYSE issues were tracked and analyzed over 5 year periods and the results were the performance had no relationship between the technical and fundamental signals and the actual stock performance ..

ned davis research took another look at the relationship and going as far back as 1927 they found when profits rose more than:

20% the s&p returned a mere 1.3% in gains

10 to 20% saw 5.8% in gains

(-10% to + 10% in profits saw a 9.3% jump in gains

(-10%) to (-25%) drop in profits saw 28.6% gains

(-25%) and lower saw a -28% drop in share price.
 
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Butterfly said:
I think a lot of it depends on the definition of "small business." We have a lot of very small businesses here, such as restaurants, hair dressers, nail salons, veterinarians, for example, that are not going to weather even the interim between being ordered to close (or having business fall off drastically) and the time they can get the aid. By the time they can get any aid, they will have lost their leases, their customers and employees may have gone elsewhere, etc.

And, call me cynical, but I do not believe any aid from the government will be easy to navigate, and I doubt that said "paperwork" will be easy, either, especially not for mom and pop type businesses. Already here we are seeing many of them being closed forever. How many months of rent is said free money going to pay for on a small business which has been shuttered?
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I'm not sure if you understand the mechanics of the stimulus bill for small businesses, which is a privately owned business with less than 500 employees. For example; bars, restaurants, hotels, hairdressers, barbers, etc. They will be able to apply for a low cost loan to stay afloat and to help cover losses while closed. If they hire back the people they laid off due to having to close, then the loan will be forgiven, or in other words, the loan will turn into a gift of money.

It's actually a win-win situation for a small business owner.
 
In addition to my last post, the following shall also apply to a small business or self-employed person or persons, as the case ma be:

Unlike previous bills and laws, even self-employed people will be allowed to collect unemployment. People on unemployment will received their state's unemployment check, which is based upon their income, plus an additional $600 from the gov't. for up to four months.
 
Given the facts of what small business owners would/will receive, why close your doors?
 
There are a few Representatives that are focusing on a follow-up stimulus bill, Stimulus II, that would include an additional $200.00 per month amount added to each SS, SSI and Veterans checks up and until the end of 2021. This was proposed by Elizabeth Warren, (I think), and a few of her fellow lawmakers have added their name to her bill.
 
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