Good Thursday A.M.,

Two big pieces of data today. First, final reading on Q1 GDP (which is not too important unless it is an outlier) came in as expected at -5.0. The market will be interested next month when we have the first reading on Q2 GDP, that will create volatility. The second piece, as always on Thursday, is the unemployment claims data. Claims were again pretty scary at 1.48mm and were far worse (by 250k) than markets expected. I don’t understand why there is such a big disconnect with traders and the real message from the economy. The PPP stimulus may have kept companies from furloughing employees while they had those funds to pay payroll with, but once those funds run out and without any additional stimulus, how do businesses continue to pay employees with little to no revenue coming in? Layer on that the second wave of cases and stricter requirements on businesses and social distancing, and this is maybe the second inning of the ballgame. Unless the government offers additional stimulus, I see unemployment getting worse, not better for the next several weeks. I am not negative, as I know once we get past this curve the recovery will be amazingly strong, we just need to work together towards that goal.

Stocks are flat today after getting beat up yesterday. Bonds hanging tough with the 10-yr at .67 and mortgage bonds flat.

Please remain safe and stay healthy, make today great!