unemployment claims

[disneysteve]

Some people have been trying repeatedly for WEEKS already without getting through.

Exactly, so they have ZERO income during that time. Kind of hard to live that way.

[james.hendrickson]

Wasn't social security supposed to solve the problem the poor and elderly not having enough income?

[disneysteve]

Wasn't social security supposed to solve the problem the poor and elderly not having enough income?

What does that have to do with unemployment? And you don't get SS benefits for being poor unless you're getting disability payments.

[LivingAlmostLarge]

Anytime you lose a job it's terrifying. My neighbor lost hers in January and her husband is still working and they aren't thrilled. They've been worried about him losing his job. She's getting unemployment because she filed awhile ago. But to be down 50% of income is not a great thing.

[~bs]

Happened to see this news article. Looks like my state isn't the only one with an archaic system. NJ has one 40 years old. I'd imagine there's a few other states using 1970s and 1980s era mainframe systems still.

https://www.northjersey.com/story/news/new-jersey/2020/04/04/coronavirus-nj-40-year-old-system-adds-delay-unemployment-checks/2944985001/

[LivingAlmostLarge]

We are up to 30M unemployment claims and I forsee more to come still even with states opening up. I don't think it's 1/14 that Singuy suggested is really lost. I think it's a lot more because companies that are "white" collar are doing layoffs. Finally after last week's unemployment they finally mentioned how it's starting to seem strange that main street is disconnected to wall street.

We've discussed it here that it's big companies and stability to come out. But I still question how do these companies do so well when their "Consumers" are not going to be employed? Has that been factored in or have analysts decided that they don't really know who is unemployed. So they cannot determine the affect this unemployment will have.

[disneysteve]

Another 3.17 million new claims last week. The market seems okay with that as the DJIA is up almost 400 points right now.

I'm sure some chunk of those people aren't newly unemployed but were just finally able to get through to file. The unemployment system is a mess in this country. There are many thousands of people who have been out for 6-7 weeks at this point and have yet to get their first check. Even if you have a little EF, which the majority of people don't, it's likely gone by now. Sure they'll get their back benefits once the system catches up but how many unpaid bills and late fees and debt will they incur until they have the money to catch up?

[LivingAlmostLarge]

So explain to me how they will go out and spend and keep the economy running? How can stocks keep going high on consumer spending? When there is nothing to spend?

[Scallywag]

So explain to me how they will go out and spend and keep the economy running? How can stocks keep going high on consumer spending? When there is nothing to spend?

Stock market is currently divorced from the economy (they have historically had an on-again, off-again relationship). Current highs are fueled on hope and powered by denial, ignorance & a combination of the two. In 1929, the Dow recovered 33% from its low in Oct before collapsing for good in 1930. I am mostly in cash and some gold now. I do own some stocks but I am nervous there too. Current market makes no sense as consumers are not going to prop the economy up just yet so better, IMO, to stay cash

[james.hendrickson]

Stock market is currently divorced from the economy (they have historically had an on-again, off-again relationship). Current highs are fueled on hope and powered by denial, ignorance & a combination of the two. In 1929, the Dow recovered 33% from its low in Oct before collapsing for good in 1930. I am mostly in cash and some gold now. I do own some stocks but I am nervous there too. Current market makes no sense as consumers are not going to prop the economy up just yet so better, IMO, to stay cash

Yes, this boggles my mind. In general, stock prices should follow earnings. Earnings are going to be lower. You can't lay off millions of people and shutter a substantial fraction of the nations companies and expect earnings to be unaffected. The market should be trending lower, but its not.

[Scallywag]

Yes, this boggles my mind. In general, stock prices should follow earnings. Earnings are going to be lower. You can't lay off millions of people and shutter a substantial fraction of the nations companies and expect earnings to be unaffected. The market should be trending lower, but its not.

People are in FOMO mode now, driving prices up. Time to take profits and wait on the sidelines with cash. A crash is coming. The bank of England has predicted the worst contraction in the UK economy since 1709. This is really bad, and sooner or later, the markets will start reflecting the start of the uneerlying economy again.

There was a scene in a Great Depression documentary from maybe August 1929. Date is unclear. Crowds run up the steps of the NYSE, then the camera turns to show a HUGE crowd cheering on Wall Street, stretching as far as the eye can see, even standing by Trinity Church where Alexander Hamilton is buried. You can see the cash in their hands - this is the FOMO crowd of 1929, wanting / trying to get into the casino that was the NYSE, people who were losing homes, families & businesses and hoping to make some money in the only thing that was going higher... the market! Made me shiver when I first saw it, makes me shiver as I write this now. I got out while the going is still good, although i lost the 30% upside.

[Scallywag]

We've discussed it here that it's big companies and stability to come out. But I still question how do these companies do so well when their "Consumers" are not going to be employed? Has that been factored in or have analysts decided that they don't really know who is unemployed. So they cannot determine the affect this unemployment will have.

Dow is up over 300+ points this morning, although 30 million Americans are unemployed? Alright! The companies that are up - that I am interested in - are TSLA & CMG. This is just ridiculous and likely has nothing to do with the underlying valuations. This appears to be totally disconnected with economic reality and is a speculative mess.

Companies like GOOG, FB etc will likely do well because they're free to use and dependant on ad revenues (that is admittedly going down). But because they're mostly free services they should be ok. Companies like TSLA & CMG should do badly in the near economically messy future though their stock prices may not reflect that reality. I believe the ones that will survive the potential devastation are the small / lean companies with healthy balance sheets & little to no debt. Being a behemoth with tonnes of debt to serve will likely work against you & these behemoths are the ones who are probably going / will go under.

[disneysteve]

Dow is up over 300+ points this morning, although 30 million Americans are unemployed?

Investors look ahead at future prospects. Many apparently feel the worst of the COVID problem is now behind us as businesses gradually start to reopen across the country and the world. So yes, 1st quarter and likely 2nd quarter earnings will be down dramatically, but that's already priced in. Now they're looking ahead to the 3rd quarter and beyond and I guess they like what they're seeing.

Last month, there were many stocks from major companies that were off as much as 90% from their highs. Assuming you have a long-term outlook, as stock investors should, that was probably the buying opportunity of a lifetime.

It will be important to see what happens to the unemployment figures over the next month or two as things reopen and millions of workers are rehired. How quickly does that spike in unemployment drop back down.

[Scallywag]

Investors look ahead at future prospects. Many apparently feel the worst of the COVID problem is now behind us as businesses gradually start to reopen across the country and the world. So yes, 1st quarter and likely 2nd quarter earnings will be down dramatically, but that's already priced in. Now they're looking ahead to the 3rd quarter and beyond and I guess they like what they're seeing.

Last month, there were many stocks from major companies that were off as much as 90% from their highs. Assuming you have a long-term outlook, as stock investors should, that was probably the buying opportunity of a lifetime.

It will be important to see what happens to the unemployment figures over the next month or two as things reopen and millions of workers are rehired. How quickly does that spike in unemployment drop back down.

I do have a long term view but left the market as it is getting overheated and over-valued. I go strictly off of a bunch financial ratios and as much as I am attracted by some stocks right now, I don't trust the market now. Obviously, growth stocks have crazy ratios but I am not in a position to give them the benefit of the doubt, even if that means a lesser / smaller return in the future.

I doubt that "forward thinking" investors are actually pricing in a potentially deep recession in the economy that stretches for more than a couple of years. The near future (next 5 years) does not look that rosy to me. Japan appears to have entered a recession and so has Germany. That should give cause for pause...but the Dow went up again.

How optimistic is being too optimistic of the future, that it borders on speculation?

[disneysteve]

Is it your belief that the market is undervalued?

I'm not a market timer so I have no basis with which to answer this question. Am I still investing? Yes, each and every month. I have 13% going into my 401k which will max it out in the fall and another $1,600/month going into our taxable Vanguard account. Month after month after month. I've been doing that for years and will keep doing it for however many more years until I retire.