This morning we learned that 6,600,000 new unemployment claims filed in the past week. Considering that economists predicted 3,300,000 new claims to be filed, this is a very scary number. Personally, I believe this number was highly understated and that reality is even far worse than the 6.6 million reported. Therefore, I expect to see massively higher numbers in the near term. This is an extremely scary situation that I clearly believe will get worse before getting better.
Stocks are climbing higher today, which given the news of the morning doesn’t seem to make sense. I believe this climb higher is due to optimism that the Fed and Treasury will need to step up and do even more to help the US economy from completely collapsing. So far, the Treasury Department is set to release $2 trillion to taxpayers and business owners. As I stated in yesterday’s market update, I believe it will take upwards of $10 trillion to keep the economy afloat. We will see how long it takes before lawmakers are pushing for further payments to Americans. As people start to miss house payments and other obligations, that is when I expect lawmakers to act.
We will maintain a locking bias.