Overnight US weekly jobless claims came in higher at 1.87m which...

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    Overnight US weekly jobless claims came in higher at 1.87m which was higher than expected and markets dipped initially only to recover back to close almost unchanged.

    A market that does not want to go down regardless and with half glass full outlook may be bullish but utterly complacent and sends a worrying sign.  Even airline stocks hog the top gainers list and they're far from capable to resume their normal operations tells you market participants are just looking at whichever stocks remained low to buy up as other sectors have become expensive. Tells you again the US market is primed for another selldown,....SOON.

    Equities provide semblance of not all is so bad while Main St is totally haemorhaging, the Government's stimulus is only keeping them afloat but if jobs are not returning anytime soon (as the article below suggests) how long can the Government continue doling out stimulus, if it becomes too long no one would even contemplate ever even wanting to work and unemployment rate can actually remain lower than otherwise (because unemployment rate only includes people actively seeking work).

    The issue is not that the Bear is dead as everyone now presumes enjoying the bull rally. It is that it has gone into an extended hibernation due to a culmination of factors including the Fed, stimulus, cabin fever betting but nothing pertaining to fundamental factors like earnings and economy , and require a longer period to convince market participants that buying on hollow fundamentals is not a sound thing, sure everyone is just speculating for short term profits knowing the reality but not wanting to miss any of it, but unless one plays the game well (not always staying in it) it could all be a zero sum game or even worse with nothing to show for.  

    Julien R Bittel — a Multi Asset Investment Manager at Pictet Asset Management — has uncovered some interesting trends

    He’s taken a look at the 10Y/3M yield curve in the US in relation to the S&P peaks and troughs.

    His research shows that following the last eight US yield curve inversions (1966–2006), the S&P 500 peaks on average 42 weeks after the inversion, and bottoms 95 weeks later.

    That’s a total of 137 weeks on average since the curve inversion.
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    1 Source: Twitter.com @BittelJulien
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    The 10Y/3M yield curve first inverted toward the end of March 2019.

    Add 42 weeks to the March inversion, and it takes us to January 2020.

    This was very close to the 20 February 2020 S&P peak.

    Add another 95 weeks, and it indicates that we are looking at a final low in the S&P 500 by the end of 2021 (December).

    If we look back at the last mid-cycle crash in 2000 (the dotcom bust), the S&P 500 fell to a low in October 2002.  

    The 10Y/3M yield curve inverted 137 weeks earlier in February 2000.

    So, the above forecast is in keeping with what we’ve seen previously.

    If Julian is correct, the bear may resume anytime within the next 3 months and taking slightly over a year to reach its final low, suggesting that 2021 may be a terrible year for both stocks and economy. 2020 being just a prelude for the great reckoning next year.

    NYC Finance Jobs Won't Recover Until 2026, Dashing Hopes Of V-Shaped Recovery

    by Zero Hedge
    Thu, 06/04/2020 - 17:05


    Many on Wall Street are trying to forecast the shape of the economic recovery in a post-corona world. Some are split between either a V-shaped, U-shaped and or L-shaped recovery. In the last three decades of recoveries following an economic shock, each recovery has been slower and slower.


    Stock investors in a post-corona world are pricing in the best-case scenario: a V-shaped recovery, which would suggest economic growth soars in the back half of the year and reaches 2019 levels. However, new signs are emerging, that narrative is a load of shit - clearly to suck retail into the markets while "smart money" continues to dump stocks.

    The report, via ThinkIQ, and first reported by Bloomberg, found New York City's finance industry won't recover until 2026.

    It said at least 8% of all finance jobs in the Big Apple have already been lost because fo the COVID-19 induced economic crash. With the loss of employment, this will have a domino effect on the local economy, anything from rents to mortgage payments to restaurant spending.
    ThinkIQ projects that employment levels in the world's top financial hub will be back to normal in six years. Most industries will take years to recover; for instance, leisure and hospitality will only reach 90% of its 2019 level by 2026.



    As for the US, 18 million jobs could be eliminated in a post-corona world. Small business operators in a recent NFIB Small Business survey were overly bearish on the recovery timeline, with a majority indicating recovery won't be seen until sometime in 2021 (40%) and 19% said between 2022-2024. So in total, two-thirds of respondents believe a recovery is several years away.


    The shape of the economic recovery is increasingly becoming more of a U or L-shaped.
 
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