Yesterday the Dow, Nasdaq, and S&P indices rose significantly. The principal rationale offered was that the "job outlook" had
brightened:
The 539,000 jobs cut by employers in April was the smallest reduction since October, and hinted at some improvement in the labor market...
Hello? Half a million people lose their jobs, and the result is hailed as a positive because
- a) it's a smaller loss than in previous months, and
- b) it was smaller than analysts had expected.
The unemployment rate is the highest it has been in about 25 years, and there's nothing in the horizon to indicate that it will improve soon. It's understandable that the financial community, the major media, and the political establishment want to reassure the public and prevent panic, but yesterday's numbers are still tragic. Even granting that the stock market is a leading indicator and always turns up before the economy itself does, it's still hard to imagine that the rally of the past two months is anything other than a "dead cat bounce."
I hope I'm wrong.
I don't think any serious person would say it was anything other than the "dead cat bounce." The upside is at least we found the floor.
ReplyDeleteI think the key words are "hinted at some improvement". The numbers are better than any month since November but they're not good by any stretch of the imagination. I hope A.Fischer is right and we've found the floor.
ReplyDeleteWell I take it back... we haven't found the floor yet. We think the floor might be approaching sooner rather than later. Hows that?
ReplyDelete