Unemployment DECREASED by 2.5 million!

[disneysteve]

It's not really a job gain, but a small recovery of losses.

Well, that's kind of what a job gain is. Unless you are at zero unemployment, a decrease in the unemployment numbers is a recovery of some of the losses.

Now some of the jobs gained are new. Lots of companies are and have been hiring. So this isn't just 2.5 million people all going back to their former jobs.

[Singuy]

Yes and no.

I think air travel is coming back. They unfortunately aren't subject to any of the state guidelines regarding masks and social distancing, which has already been evident on the packed flights that have continued to fly throughout the pandemic. The Fed would have to impose those rules and the Fed has been completely useless in dealing with COVID.

75% of airline profit comes from business travel, so the airlines don't care so much initially if you are taking a trip to the Grand Canyon or going to visit grandma. It's the business travel they want primarily, and as travel restrictions are lifted, that is coming back. I know a few people who never stopped their business travel this whole time and a few others whose jobs are already starting to make travel plans for them in the next month or two. I agree that leisure travel will be slower to recover.

Restaurants, I think, are a mixed bag. Virtually every restaurant in town has remained open for take out business. Surely, if they were able to do that, it will help them to be able to reopen the dining room even if it's only at 30% capacity to start. That's better than 0%. I do think we may see slimmed down menus with fewer options, focusing on their top sellers. That will reduce their food costs, simplify food prep, and reduce staffing needs.

I think the biggest problem with cruise ships will be ongoing travel restrictions. Canada has banned ships with more than 100 people until the end of the year. Many countries are still seeing their COVID cases rise daily. They haven't peaked yet like the US has, so they won't be opening their borders until the situation improves which could be months away. So the cruises will be limited as to where they can draw guests from and where they can sail to.

Packed airline travel during the pandemic is a poor metric to use for flights going forward due to limited flights during the pandemic. In fact people had to jump through multiple hoops just to get back to their home country due to hundreds of cancelled routes. That's not a very good indicator.
Teleconferencing is taking over and that's the biggest problem with what you said, how 75% of the airline profits come from business travel. The pandemic allowed many businesses to try different things. If they found that to be a time/money saver, then there's no reason to go back to routine dealing with quarantine protocols. Don't forget, the U.S is the epicenter of Covid right now and many countries require people from the U.S to quarantine for 14 days. This is a major drag on travel for business and pleasure.

[disneysteve]

Packed airline travel during the pandemic is a poor metric to use for flights going forward due to limited flights during the pandemic. In fact people had to jump through multiple hoops just to get back to their home country due to hundreds of cancelled routes. That's not a very good indicator.
Teleconferencing is taking over and that's the biggest problem with what you said, how 75% of the airline profits come from business travel. The pandemic allowed many businesses to try different things. If they found that to be a time/money saver, then there's no reason to go back to routine dealing with quarantine protocols. Don't forget, the U.S is the epicenter of Covid right now and many countries require people from the U.S to quarantine for 14 days. This is a major drag on travel for business and pleasure.

I have yet to find anyone who is happy with teleconferencing as a replacement for in-person meetings. I'm quite sure the business travel will resume as soon as it possibly can. It's already starting to happen.

The epicenter of COVID is actively shifting from the US to central and south America. We've passed our peak while cases there are still rising rapidly. Numerous other countries are also in the earlier stages where we were a month or so ago.

At least in the US, the traveler quarantines are toothless recommendations. Nothing at all is being done to attempt to enforce them. I'm not sure about other countries.

[Singuy]

I have yet to find anyone who is happy with teleconferencing as a replacement for in-person meetings. I'm quite sure the business travel will resume as soon as it possibly can. It's already starting to happen.

The epicenter of COVID is actively shifting from the US to central and south America. We've passed our peak while cases there are still rising rapidly. Numerous other countries are also in the earlier stages where we were a month or so ago.

At least in the US, the traveler quarantines are toothless recommendations. Nothing at all is being done to attempt to enforce them. I'm not sure about other countries.

Our hospital and I'm sure yours too has an uptick of Covid+ pts due to relaxing of restrictions. Compounding this with active protests and half of the republican voters think you shouldn't live in fear + masks doesn't help + virus is fake news, I have a feeling that the BEST case will be to maintain a moving average of 20k/day worth of new cases until we have a vaccine or the virus mutates to a less contagious/deadly version.

What I am saying that there will not be a V shape recovery of clients for restaurants, entertainment, or travel, at least not when we have 20k new cases per day reported from the U.S. If we were South Korea and actually near eradication of this virus through a more responsible manner of active control, maybe. However I have very little faith in our leadership as they continue to downplay the need for mask wearing and the virus itself. I am not in the camp that thinks this virus is as big of a deal as some people thinks, but I do think we are not even close at trying to reduce the number of new cases to the point where I am confident there will be a V shape recovery in the sectors I have concerns about.

[disneysteve]

Our hospital and I'm sure yours too has an uptick of Covid+ pts due to relaxing of restrictions.

Nope, not yet at least. Our inpatient number peaked on 5/8 at 235. Yesterday it was 105. We’ll see what happens over the next few weeks as more things reopen.

[Smallsteps]

I wonder if all the fraud unemployment claims are also a factor ...
if millions of claims were filed and counted as lost jobs... but in fact they were fraud................. as states/ people catch the fraud and stop the claims then the numbers of claims go down as quickly as they went up.
It is been known for years that the way some government stats are counted can be way off due to missing or inaccurate data.

Hopefully as most realized that we need to make more item in this country instead of being held hostage to foreign suppliers will create many new jobs.

[LivingAlmostLarge]

There was a mistake in the may jobs report. The number was about 3% higher and the Bureau of Labor Statistics was working to correct it. Yes it's down from 19.5% but not as much as people think. April had the same mistake and was calculated at 14.7% but adjusted up to 19.5. So what does that mean? We did get some jobs back more people still without jobs.

[Singuy]

I am calling it now, this is an employment dead cat bounce. Travel, entertainment, and dining will not even remotely be the same as before until at least 2 years into this thing(and post vaccine). Owners will find that it'll be more expensive keeping shop open and have 25% of their usual sales than to just keep it closed, especially restaurants. Same with travel because there are fix cost to everything. Anything that has razor thin margins cannot stay afloat when it takes 80%- 90% capacity just to break even. Cruise ships are notorious for needing at least 94% occupancy to break even(hence sometimes they pretty much give away the price of the ticket just to fill the ship).

So I would look to take profit on bets like cruise ships/travel/airline/dining when there's exuberance in the air.

Anyone take their profits before these industry just dumped 25% the last two days? This post aged like fine wine.

[disneysteve]

Anyone take their profits before these industry just dumped 25% the last two days?

No profit-taking here. I'm not a day trader. I'm a long term investor. I did buy AAL and JETS back when things were crashing. They are both up a few dollars each from my basis and I'm planning to hold them for the continued recovery. Airline volume is already picking up and will increase a lot more in the next couple of months. I'm happy to hold onto these for a couple of years or more if that's how long it takes.

[Singuy]

The reason why I advocated profit taking vs long term because the sector that got decimated couldn't get back to their original value for years. I was bullish on ccl under 10 dollars, and I expected to sell at 20 because it's a long road ahead long term. I didn't expect ccl to be over 20 just after a months. I expected it to rise to 20+ next year and then takes about 3-5 years to go back to original levels. But of 20+ is early then it just make sense to take profit because the market is obviously way ahead of itself.

Bankruptcy risk is still high for the travel sector due to their razor thin margins and this Covid total disruption. 2x your money and invest into something that is the future is how I looked at it.

I never advocate profit taking, you know that. I rarely urge people to take profit. But when I wrote that post it was perhaps my one and only time telling people is a good idea to take profit.

[kork13]

Anyone take their profits before these industry just dumped 25% the last two days? This post aged like fine wine.

I did end up selling nearly all of my taxable investments on the 10th, because on the 9th, DW & I decided to use it to buy our next home in cash. By the time the sales went through, most of it was down 2% or so, but overall it was still a 22% total gain since March. The only ones I held onto were a few shares of a couple stocks & my JETS -- partly because they had fallen too much already (JETS down 7% when I sold), and I figure I still like their prospects enough to stay patient on that last $4k.

[disneysteve]

The reason why I advocated profit taking vs long term because the sector that got decimated couldn't get back to their original value for years. I was bullish on ccl under 10 dollars, and I expected to sell at 20 because it's a long road ahead long term. I didn't expect ccl to be over 20 just after a months. I expected it to rise to 20+ next year and then takes about 3-5 years to go back to original levels. But of 20+ is early then it just make sense to take profit because the market is obviously way ahead of itself.

Bankruptcy risk is still high for the travel sector due to their razor thin margins and this Covid total disruption. 2x your money and invest into something that is the future is how I looked at it.

I never advocate profit taking, you know that. I rarely urge people to take profit. But when I wrote that post it was perhaps my one and only time telling people is a good idea to take profit.

I think that's all very fairly stated. But it's also part of why after my initial purchase of AAL, I then switched gears and bought JETS instead. There certainly may be individual airlines that don't recover but I'm sure the airline industry isn't going away. I have thought about selling as I'm ahead, but I didn't do it as a short term play so I'm going to hold on for a while and see what happens. I also didn't invest that much overall - 15K total - it won't make or break us no matter what happens.

Now if I had gone in big, yeah, I'd probably be getting out.

[cypher1]

I think that's all very fairly stated. But it's also part of why after my initial purchase of AAL, I then switched gears and bought JETS instead. There certainly may be individual airlines that don't recover but I'm sure the airline industry isn't going away. I have thought about selling as I'm ahead, but I didn't do it as a short term play so I'm going to hold on for a while and see what happens. I also didn't invest that much overall - 15K total - it won't make or break us no matter what happens.

Now if I had gone in big, yeah, I'd probably be getting out.

I'm in the same boat with my initial purchases of RCL, AAL, even DIS for stocks since they're pretty small investments (I think 1-2% of portfolio). I'm just going to let them ride for the next 2-5 yr. However, I plan to keep DIS and JETS for much longer.

[disneysteve]

Of course today everything is plunging because people are finally waking up to the fact that COVID isn't over and as things have reopened, cases are climbing in 25 or so states. Texas, Arizona, North Carolina, and others are seeing their hospitalization rates climb. I heard that cases in Texas are up 40% since Memorial Day. So the "second wave" is getting everybody nervous even though this was all totally predictable. We knew that as places reopened, especially those that did so prematurely ignoring the science and CDC guidance, we would see cases spike.

[james.hendrickson]

Of course today everything is plunging because people are finally waking up to the fact that COVID isn't over and as things have reopened, cases are climbing in 25 or so states. Texas, Arizona, North Carolina, and others are seeing their hospitalization rates climb. I heard that cases in Texas are up 40% since Memorial Day. So the "second wave" is getting everybody nervous even though this was all totally predictable. We knew that as places reopened, especially those that did so prematurely ignoring the science and CDC guidance, we would see cases spike.

Oh man - I'd hate to be a state governor these days. If you keep the economy closed, you get civil unrest and mass unemployment, but you save lives. If you open up the economy you get more dead. What an awful decision to have to make.