16 million people just got laid off but U.S. stocks had their best week in 45 years

[turbinetree]

Published: April 11, 2020 at 3:49 p.m. ET
By Andrea Riquier

This was the best of weeks, and it was the worst of weeks.

To start with the “worst:” we learned that 6.6 million more people filed for unemployment for the first time, for a three-week tally of more than 16 million and taking the jobless rate up to 10% or more, even as it likely underestimates the number of people who haven’t been able to get through to overburdened state unemployment systems.

The “best” part may have been just as unsettling. Stocks had their best week in over four decades, with the Dow DJIA, +1.22% up 12.67%, the S&P 500 SPX, +1.44% gaining 12.1%, and the Nasdaq COMP, +0.77% up 10.59%.

In fact, two sectors of the S&P 500 charted their strongest week ever. The chart above shows the sector performances, with data from Dow Jones Market Data. The real estate sector was only launched in 2016; historical data before that is back-tested. All the other sector data dates back to 1989.

https://www.marketwatch.com/story/16-million-people-just-got-laid-off-but-us-stocks-had-their-best-week-in-45-years-2020-04-10?mod=home-page

What’s more, he said, “The Fed knows it must keep equity markets stable to rising in order to keep the 40% of Americans who own stocks sufficiently liquid and confident to spark a recovery in consumer spending. This is the classic wealth effect, something the Federal Reserve understands well.”

It’s worth pointing out that if 40% of Americans own stocks, 60% do not. And not only are those people not sparking a trickle-down recovery, they may be just trying to keep food on the table.

[safeinOhio]

1. Truth be known....

It's all a house of cards.

[customerserviceguy]

2. A rather long sucker rally

It will get the hot air taken out of it again when there's a knock-down drag-out fight over the next stimulus bill.

[bluestarone]

3. All FAKE like the president

The day of reckoning will come for the stock market

[panader0]

4. The stock market is like big poker game for the very rich.

There's a lot of bluffing going on.
Of those 40% who own stocks, a small portion of that own the most.
90% of the market is controlled by the top ten % of players.
I'll sit that game out.
I still don't know why people think it's a good indicator of life in the world
outside wall street. (i.e., the real world)

[pansypoo53219]

8. its a casino. fake prosperity. sign of our decline. read kevin philips american theocracy.

pt 1 + 3. skip 2. we are spain 1500 now.

[kentuck]

6. How much more proof do people need?

to see that it is a racket?

[fescuerescue]

7. The market isn't based on employment

It's based on future expectation of earnings growth.

So it's logical that these events could cross. ESPECIALLY after one of the biggest downwards runs in history.

[Cicada]

9. The market reflects the future, not the present, so this story is a bit illogical

In normal times pruning workers probably is good news for the stock market. Unexpected news of greater job reductions often has triggered stock hikes. But here the market crashed weeks ago in anticipation of massive job losses to come. Now the job losses are materializing but the market is probably thinking about the death rate flattening and government passing huge additional bail outs.

Good idea in this story, but the juxtaposition of job losses and stock hikes is probably accidental.