Looking to Put America Back to Work

After making a valiant effort to cross over the 2800 barrier on the S&P last Thursday, stocks are down in early morning trading.  The significance of the 2800 mark is rarely discussed.  However, a break higher could represent a reversal where stocks are on a longer term upward trend.  With corporate layoffs and the unemployment rate at record highs, it would be absurd to see stock prices climb back towards all-time record highs.  Although stock investors have expressed, what I think is unjustifiable optimism, this would be an entirely new level of irrational behavior. I continue to see stocks falling.

The question of when to re-open American is dominating headlines today with President Trump stating that he will soon announce a plan to get people back to work.  The clear concern is whether sending people back into the workforce would cause a resurgence of Covid-19 cases.  On the other hand, each day that goes by under a stay at home order, damage to the US economy becomes more severe.  Hopefully, there will be a balance where businesses are able to open while employees and customers are kept safe through measures such as masks, gloves and protective eye wear.  That seems to be the best case scenario at this point.

Mortgage bond prices are falling today, adding upward pressure to mortgage interest rates.  We will maintain a locking bias.