Good Morning on this thankful Thursday,

Bonds are doing well this morning with the 10-yr at .61 and mortgage bonds +33. Some improvement is making its way into the rate sheets. It all which makes sense given another 4.4 million jobs were lost. We now have lost 26 million jobs more than any other economic cycle ever. As a matter of fact, I think if you added the job losses from the Great Depression and the Last Recession, the totals are currently equal (and we are just in week 5 of this period). The longer states remain closed, the more rapidly the unemployment claims will add up.  Typically the jobs report, which is the most important economic data set for the month, is released the first Friday of the new month. With May first being next Friday, I think the release will be pushed to the following Friday on May 8th  (likely not enough time to compile all the data and prepare the report by 5:30 a.m. the following morning to meet the 1st) and I expect it to be a real disappointment. I would not be surprised if that unemployment rate is already at 15% nationally.

Stocks are improving, how/why, I just don’t know. Volume is light, which can create volatility, but who thinks corporate earnings are going to be strong despite an unbelievably low cost of capital, low interest expense, and advantageous tax treatment? When looking at any sectors other than maybe Pharmaceuticals and Tech (including Netflix, Amazon, Apple, etc..) the revenue model looks challenged. Consumer confidence may be the bright spot, as although it has pulled back a bit, it has only dropped marginally despite the enormity of job losses. Typically, consumer confidence follows unemployment in lock step on the way down. So do consumers stay optimistic and support the economy (consumer spending is 70% of our economy) or is this now a lagging indicator and it is soon to drop like a rock?  We will see in the next few weeks.

The choice to stay positive is just that, a choice. I am choosing to stay bullish on the US, and more importantly housing, knowing that we will always have some hurdles to overcome.

Some great charts in the WSJ today. The first on when states could/should begin to reopen.

The second chart on positivity. 70% of people asked expect to be no worse off in 12 months than they are now.

All great stuff.

Please remain safe and stay healthy.
Make today great!