April 3, 2020 - Market Update

The Fed purchased $25B of their $30B daily target while Treasuries continued to rally Thursday on the bad jobs data pushing the 10-year up 5/32^nds, pushing the yield down to 0.61%, while the 30-year bond rose 27/32^nds to yield 1.27%. 

Americans filing for first-time unemployment benefits rose 6.6 million last week, as businesses closed to try and stop the spread of the virus. 

Now, unemployment has reached 10 million over the past two weeks.   US equities spiked up nearly 700 points after President Trump hinted at a possible oil price truce between Saudi Arabia and Russia.  Oil prices surged 20% +/- on the news, but it seems a bit counterintuitive that the prospect of higher oil prices is good for economic growth.  Whatever the driver, the DOW managed a 2.2% gain by the close. 

This morning the world is waking up to the news that global COVID-19 cases have passed 1 million people with nearly ¼ of those here in the US. 

The US labor force numbers 165 million. In the past two weeks the number of unemployed has jumped by a staggering 10 million!! Assuming job creation is currently 250,000/week as Amazon, Walmart and supermarkets ramp up, the unemployment rate in the past two weeks has risen from 3.5% to a shocking 9.3%. Ignore today’s employment report; it looks at the week of 3/12/20 before any lockdowns happened and commerce stopped.