Published
9 months agoon
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Happy Friday, everyone. U.S. jobs numbers come out in a few hours. They will be brutal. But investors are looking beyond that, to stimulus measures and recovery data, sending global stocks higher.
Let’s see where they’re putting their money.
42.6 million. As noted above, the May jobs report comes out in a few hours. The numbers will be bad, but won’t hardly tell the full picture. Yesterday’s report on jobless claims is a far more accurate indicator of the carnage in the labor markets, showing 42.6 million workers in the United States have now filed for unemployment benefits over the past 11 weeks. Yesterday’s tally of 1.9 million jobless claims was roughly 200,000 lower than the prior week, again more or less in line with analysts’ consensus. The nearly 43 million unemployed Americans means that just about one-quarter of eligible American workers are out of a job. And this does not include the millions of Americans on reduced-hours and reduced-pay. The jobs-destruction toll gets more troublesome every week despite the flattening curve:
9,741.97. Why dwell on bad news? Let’s go straight to the good stuff. Yesterday morning, roughly 90 minutes after the latest jobless claims numbers came out, the Nasdaq 100 touched a record high. It didn’t stay there; it closed a good 110 points off that high following choppy afternoon trade. Still, that brief milestone is well worth noting. The Nasdaq 100 is up nearly 39% since its March low, fueled by the Big 5—Microsoft, Amazon, Apple, Facebook and Google’s Alphabet. As Fortune has reported, the dichotomy between “winners” and “losers” has become even more apparent in this market. “Where there’s quite a bit of uncertainty, investors almost always…are on the hunt for growth and certainty—that’s the magic combination,” Wells Fargo Investment Institute’s senior global market strategist Sameer Samana recently told Fortune. In the meantime, let’s all marvel at this lovely “V.”
7.21 trillion. But not a penny more. The Fed balance sheet as of June 3 hit $7.21 trillion. What’s on the Fed’s shopping list every week? U.S. Treasurys, commercial paper, PPP assets, to name a few. The Fed balance sheet has been growing at a clip of about $50 billion per week. Why do we care? The central bank is dead-set on keeping the taps flowing so as to keep the credit markets running smoothly, which, in turn, is providing rocket fuel to the equities markets. A lot of markets observers are pointing to the rise in stocks and the Fed’s spending spree trending in line. The brilliant chaps at Market Ear point out:
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Have a nice weekend, everyone. I’ll see you here on Monday.
Oh, and about next week: I’m taking Bull Sheet on the road come Monday. The Ministry of Get-out-of-town says it’s okay.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://docs.google.com/forms/d/e/1FAIpQLSeIHPCqUtls_HQxyGwn7sF1_ksLbrNe2-CJTEBBkA-kszFRZA/viewform?usp=sf_link
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