OT - Dow plunges 1,175 - worst point decline in history

[oldpotatoe]

[QUOTE=Burnette;2733212]The recovery graph isn't exactly V shaped, but it's close. Market rally numbers:

The S&P 500 has returned 37.7% over the last 50 trading
days, making it the benchmark index's largest 50-day rally
in history, according to LPL Financial.

. If history is any indication, there could be more gains
ahead.

. Looking at the other largest 50-day rallies, the firm found
that stocks were higher 100% of the time six and 12
months later. The average 6-month return was l0.2%,
while the average l-year return was 17.3%.

The S&P 500 has steadily climbed higher after
dropping to an intraday low of 2,191. 86 on
March 23 putting to an end the longest bull
market in history as Covid-19 battered global
markets. The benchmark index is now 41.7 %
above that low, and less than 9% from its
February all-time high level.


Some snipped.
-Isn't that 'kinda' artificial, since its drop was the largest on history also?

-'History'?? Yer kidding, right? Considering the history 4 months ago?

I would say 'this' 50 day rally 'might' be little 'different', considering..yes?

Kinda makes the Great Recession and even the Great Depression pale in comparison..
I'm not any kinda of financial guy but predicting the future after this really bizarre past, well..might not be too accurate..might be but

Apple and Microsoft

"They've been able to grow even when the economy doesn't grow. And when the economy does grow, they grow faster. That is an incredible attribute," he says.

Since they make stuff for sale..how do they 'grow even when the economy doesn't grow'???

[Tony T]

Unemployment fell to 13.3 percent in May, with a gain of 2.5 million jobs.

The unemployment rate fell to 13.3 percent in May, the Labor Department said Friday, an unexpected improvement in the nation’s job market.

The unemployment rate fell from 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II.

Many economists expect that unemployment will begin to ease as states reopen and businesses call employees back to work. But it will take far longer for the economy to climb out of the hole than it did to fall into it.

https://www.nytimes.com/2020/06/05/b...ronavirus.html

[Spaghetti Legs]

It is generally accepted that the stock market doesn’t necessarily reflect the economy but to me this recent market surge is not only reflective of the nation’s wealth gap, but a wealth disconnect. The pandemic has crushed the poor and lower middle class but hasn’t seriously affected the rest for the most part and the only real place for the cash flow to go is into the market.


Just some perceptions from my admittedly incomplete understanding of our economic machine. Part of my perception though is that this American capitalist model is terribly flawed.

[alancw3]

Originally Posted by Ken Robb

I just had a big CD mature and so far the best rate I have found for the cash is .35%---YESSSS! 1/3 of 1%. I'm expecting a call from my broker and a fixed income specialist from Chas. Schwab to see what ideas they may have. I'm retired so I'm not interested in any crazy-wild equity plays. I still hold dividend-paying stocks. I don't expect any reasonable rates on CDs until late November at the earliest.

I just purchased six month T-bills paying .15%. I guess for me being retired also at this point in my life I am more interested IN the return of my investment than the return ON my investment. We all have our own tolerance to risk.

I still think that the stock markets are in for a rude awaking as earnings season rolls around.

[buddybikes]

>>any economists expect that unemployment will begin to ease as states reopen and businesses call employees back to work. But it will take far longer for the economy to climb out of the hole than it did to fall into it.

Till round 2 hits and puts states in total confusion

[verticaldoug]

Originally Posted by Tony T

Unemployment fell to 13.3 percent in May, with a gain of 2.5 million jobs.

The unemployment rate fell to 13.3 percent in May, the Labor Department said Friday, an unexpected improvement in the nation’s job market.

The unemployment rate fell from 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II.

Many economists expect that unemployment will begin to ease as states reopen and businesses call employees back to work. But it will take far longer for the economy to climb out of the hole than it did to fall into it.

https://www.nytimes.com/2020/06/05/b...ronavirus.html

https://www.bls.gov/news.release/jec.nr0.htm

The commissioner put out a statement to keep the report in context. It seems the real rate is 3% higher. The instructions are very confusing. Who counts who doesn't count... The data makes absolutely no sense versus other gov data. Essentially the instructions appear to be interpreted as if you aren't working because your business is close for coronavirus, don't count yourself as unemployed.

Weekly initial claims and continuing claims released every Thursday are more reliable.

[November Dave]

Originally Posted by verticaldoug

https://www.bls.gov/news.release/jec.nr0.htm

The commissioner put out a statement to keep the report in context. It seems the real rate is 3% higher. The instructions are very confusing. Who counts who doesn't count... The data makes absolutely no sense versus other gov data. Essentially the instructions appear to be interpreted as if you aren't working because your business is close for coronavirus, don't count yourself as unemployed.

Weekly initial claims and continuing claims released every Thursday are more reliable.

Thanks for this. This might be a rhetorical question, but if the data makes no sense and isn't the unqualified good news that the major outlets are presenting it as, why are futures rallying so hard?

Related and possibly also rhetorical: have ETFs and indexes dominated by a few huge players irretrievably skewed the market?

[54ny77]

This.

Business is still getting done, albeit in a radically transformed means.

Companies that cater to a new paradigm will thrive. Microsoft is one of those giant companies uniquely positioned to dominate in that sphere, both software and "hardware" (cloud).

I do think many sectors of the economy will suffer from Darwinism, and the outcome is not going to be pretty.

November Dave that's a good question, because the impact of ETF holdings, which are primarily synthetic, i.e. derivatives, tends to exacerbate the swings up or down. That very much happened during the 2008 financial crisis albeit more so in the debt markets--at least at the beginning of it, i.e , the root cause. When something is leveraged 100x, it doesn't take much to magnify the impact of a loss. The scale of various derivative markets is so massive it is mind-boggling.

Originally Posted by verticaldoug

It's simple. In the last 13 weeks, the FED has expanded its balance sheet the same amount it did in 6 years after the 2008 recession (9/2008-9/2014)= +3 trillion dollars

That's 3 trillion focused on financial assets (not the broad economy) so is it surprising the markets are up?

And for good measure, you force small businesses to close, basically handing a monopoly to online and big box stores.

[veloduffer]

Originally Posted by November Dave

Thanks for this. This might be a rhetorical question, but if the data makes no sense and isn't the unqualified good news that the major outlets are presenting it as, why are futures rallying so hard?

Equity markets are trading on expectations rather than hard data. So if a bad report (say jobs report) is announced but not as bad as expected, the markets will rally.

Market-weighted indices are dominated by large market cap companies, in this case tech which is less affected by COVID. A better indication of the economy would be something broader than the S&P 500 and DOW, like the Wilshire 5000 or an equal weighted index like the Russell 3000E.

[texbike]

Originally Posted by verticaldoug

https://www.bls.gov/news.release/jec.nr0.htm

The commissioner put out a statement to keep the report in context. It seems the real rate is 3% higher. The instructions are very confusing. Who counts who doesn't count... The data makes absolutely no sense versus other gov data. Essentially the instructions appear to be interpreted as if you aren't working because your business is close for coronavirus, don't count yourself as unemployed.

Weekly initial claims and continuing claims released every Thursday are more reliable.

Am I wrong to be suspicious of anything put out by the current administration including the unemployment numbers? We ARE in an election year, polling numbers are down for the incumbent, the economy is hurting, AND the Department of Labor/BLS leader was installed by the Prez and is a former Special Assistant to the AG William Barr. The unemployment numbers all of a sudden went in a strangely different direction than everyone expected. Is it possible that there's been a bit of manipulation at play here if not outright deceit?

Texbike

[54ny77]

same as it ever was.

Originally Posted by texbike

Am I wrong to be suspicious of anything put out by the current administration including the unemployment numbers? We ARE in an election year, polling numbers are down for the incumbent, the economy is hurting, AND the Department of Labor/BLS leader was installed by the Prez and is a former Special Assistant to the AG William Barr. The unemployment numbers all of a sudden went in a strangely different direction than everyone expected. Is it possible that there's been a bit of manipulation at play here if not outright deceit?

Texbike

[kppolich]

Originally Posted by veloduffer

Equity markets are trading on expectations rather than hard data. So if a bad report (say jobs report) is announced but not as bad as expected, the markets will rally.

Market-weighted indices are dominated by large market cap companies, in this case tech which is less affected by COVID. A better indication of the economy would be something broader than the S&P 500 and DOW, like the Wilshire 5000 or an equal weighted index like the Russell 3000E.

This 100% for the entire history of time and the future.
Reopening over time and blatant disregard for COVID by the public and more importantly the media in the last 10 days is making it easier to get started getting back to work without the stigma of 'Not Yet' or 'We Aren't Ready To Reopen'

Even if there is a second wave, obviously the media has a new fish to fry and I doubt it will get the coverage with a new kid on the block for now. Attention spans are the enemy of progress and ally of marketing. I'm sure July will give us something new to overreact about and potentially bring the market run back down, but until then sit back and enjoy the ride-- like you are on a rollercoaster.

[Burnette]

Market up 700, sitting at 27,000, let's see if it holds

[verticaldoug]

Originally Posted by November Dave

Thanks for this. This might be a rhetorical question, but if the data makes no sense and isn't the unqualified good news that the major outlets are presenting it as, why are futures rallying so hard?

Related and possibly also rhetorical: have ETFs and indexes dominated by a few huge players irretrievably skewed the market?

Generally, I think the NFP is a bit of a trading opportunity once a month, but not worth much beyond that.

Yesterday's announcement by American Airlines of increasing their flights in July by 74% was much more aggressive than people expected, and I think that kicked started everything.

I am pessimistic on job recovery. I think that large corporations will figure out they don't need people. But this is a separate issue from whether or not stocks go up

The PPP and other stimulus measures really are like Paul Krugman 's helicopter money. You need to give the administration some credit for this and those dollars had a lot of bang for the buck.

[fiamme red]

Why the stock market doesn't care about mass unemployment, a pandemic, or civil unrest: https://www.nytimes.com/2020/06/05/b...esnt-care.html.