That was one ugly jobs number that came out Friday, but we knew it would be bad. Jobless claims over the last several weeks told us the number would be high, but the reality of 20 million job losses is sobering when the truth is finally revealed. The unemployment rate zoomed up to 14.7%, which is probably going to rise up over the next few months. Numbers we thought we'd ever see again - similar to the Great Depression nearly 100 years ago.
But a funny thing is happening with all this bad news - markets are rising! In striking fashion, the SPX 500 rose up on the worst job numbers ever in history to its highest weekly close since the coronavirus spread started in the U.S. in early March. With all that bad news still settling in, how in the world are people still buying stocks? It makes no sense, does it?
Alas, the stock market is a magical discounting mechanism, always looking forward. It's quite an amazing engine of efficiency. The bad news that continues to come out on the economy may very well be priced into the markets. And that is frustrating the bears and the bulls alike. The bears are looking for lower lows, while the bulls hesitate and are waiting for a dip, but when one comes (like the prior week) they get weak in the knees.
The markets will always make the crowd look foolish, and right now it's doing a great job of it. We have talked recently about paying more attention to the price action. That is always the case, but more now than ever. As the uncertainty permeates the 'experts' come out with their best 'advice' to follow. Yet this often pales in comparison to the message of the markets, which is one we need to consider FIRST before making our investing/trading decisions.
In the end, the market will do its thing and no apology is necessary. You can go with the flow or choose not to. Just some advice: Do the former and not the latter.