1+ Years of Gains Erased, Jobless Claims Surge, Yield Curves Normalize

Stocks may have had a relatively stable day yesterday (by recent standards, anyway…) but a look back at history shows that we’ve so far only wiped out 1.3 years of gains, and—coming off the longest period of economic expansion on record—that means we have significantly more room to fall. Given the recent surge of unemployment claims—this week saw a jump of 70,000 and next week is projected to be worse—and the Fed’s recently adopted Sahm rule, it’s more than enough to signal an approaching recession. Are you prepared to ride it out? Unsurprisingly, manufacturing has plummeted, more than erasing its recent gains, and EM stocks have taken a significant hit. As the U.S. wades into the Saudi/Russian oil standoff and the Fed piles on additional stimulative measures, bond yields continue to wobble as investors struggle to make sense of the situation. Will additional global central bank intervention have the desired stabilizing effect? Let’s hope so, given the sky-high price tag. Finally, China’s recovery offers some hope that the situation may be relatively short lived. In the meantime, we’ll all be getting our money’s worth on housing costs as #socialdistancing continues and we settle into staying home as much as possible.