Your Tuesday Market Blip 3/24/20

Your Tuesday Market Blip 3/24/20

Stocks bolted higher as Congress and the White House appeared to make progress on an economic stimulus package that could be $1.6 trillion or bigger. At the close the Dow gained almost 11% or 2,112 points to close at 20,704. Stocks across all sectors were higher with beaten down bank, manufacturing, energy and airline sectors doing better as they snapped back from depressed levels.
Last week the computer trading gun slingers had de-levered and gone to zero allocation in stocks and some had even gone short. Given today’s news of the stimulus plan coupled with reems of cash on the sidelines and the possible need to cover short positions the market bolted higher at the open and never looked back. Economic data however is showing how serious the virus shutdown has been. Unemployment claims were up 33% last week and the gurus are expecting to see that explode higher this week and each week following until we start to get back to work.
Many are comparing this virus to the 1917 Spanish flu which caused the Dow in 1917 to fall 33%. The Spanish flu surged in 1918 and to a lesser extent in 1919 but the Dow recovered and posted positive numbers in each of these years. In checking historical articles from the time of the Spanish flu, churches, schools and businesses were shut but army camps were open as the US was preparing to send troops to Europe. Some of these soldiers said that while in formation in the cantonment areas where they were training guys would collapse from the flu and be taken to the hospital while the rest of them continued to train and prepare.
Yesterday Gov Jay Inslee ordered a lockdown for the State of Washington and in his closing remarks he cited Walt Whitman which I think was very appropriate. "The courage of present times and all times, of fighting through the storm with knuckles tight and not giving back an inch to save others consumed by the tides," This spirit is needed, he said, "because life will be different in Washington for awhile, but we will keep working until this pandemic is defeated."
"Be of good cheer. We will not desert you,"

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