WASHINGTON – US stocks took their second swan dive in a row Friday morning. Averages have recovered somewhat in the midafternoon. That’s perhaps due in part to the“better than expected” latest unemployment rate announced by the Feds earlier this morning. The US unemployment rate “unexpectedly” tumbled to 8.4%. You’ll likely here little about this over the weekend via the standard Democrat owned and operated media outlets. They’ll give this great economic story their usual response: *Crickets*
More on the latest unemployment rate. Good news for sure
Despite being controlled by NBC’s Evil Empire, CNBC can still at least report the business facts. That remains true even though they eventually get spun or ignored by the in-house partisan hacks that eventually spin the story for NBC. Via CNBC, we learned the following.
“Nonfarm payrolls increased by 1.37 million in August and the unemployment rate tumbled to 8.4% as the U.S. economy continued to climb its way out of the pandemic downturn.
“The unemployment rate was by far the lowest since the coronavirus shutdown in March, according to Labor Department figures released Friday. An alternative measure that includes discouraged workers and those holding part-time jobs for economic reasons [the U-6, never reported under the Obama Administration –ed.] also fell, down to 14.2% from 16.5% in July and 22.8% at the peak in April.
“Economists surveyed by Dow Jones had been expecting growth of 1.32 million and the jobless rate to decline to 9.8% from 10.2% in July.”
It’s getting better all the time. (Most of the time)
Good to great. Forget the now artificially prolonged coronavirus lockdowns that keep many American workers under effective house arrest. And forget America’s already wildly sloppy school opening season. You just can’t keep President Trump’s pre-Covid-19 bullish economy down for long. Our current and likely ongoing market crash, primarily due to wildly overinflated prices for Big Tech stocks, may prove sickening. For the moment. But it will likely restore a bit of sanity to the pricing of those overinflated tech stocks. They’re the ones getting hit the hardest.
The VIX tells us it’s time for a portfolio dump-a-thon
We reluctantly dumped our shares of Alphabet / Google (trading symbol: GOOGL), Apple (AAPL) and Amazon.com (AMZN) to scoop up our still-handsome remaining profits rather than let the sellers gobble them up. But when some measure of sanity gets restored to these shares, we plan to sneak back in. Little by little. The volatility here is incredible. As you can see in the following up-to-the-minute VIX volatility chart below.
Note Thursday’s waterfall decline and Friday’s not quite successful attempt to reverse the trend, both noted in the far right of this chart. Those not familiar with this one should know that (unless you’re holding short positions), the VIX chart is a little like a golf score. The lower, the better. So when this charts begins to spike, volatility – and occasionally disaster – lie ahead. So we may be settling down. At least a bit. Which is good, because a potentially negative news long weekend is coming courtesy of Monday’s Labor Day holiday.
The political headline risk watch continues this weekend
Meanwhile, from Blow-dry Nancy to fake anti-Trump news stories (smears and slanders) likely to cause at least some headline risk, our CDN SNAFU Alert (situation normal, etc.) remains in effect at least through Tuesday. We’ve done the tiniest bit of buying here to take advantage of a few absurd price declines in small but usually stable issues. On the other hand, we’ve also peeled off, for now, some smaller positions we’d begun to build, courtesy of today’s zero commission era. (You never used to be able to trade this way profitably.)
Political and business stories are coming at us faster than we can cover them, so we’ll try to get back to a few of these over the weekend when we have more time to track down what’s credible and what’s not.
Analyzing stories vs. “breaking” stories without corroboration
We generally can’t break stories here because A. We don’t have a big, underpaid research staff manning social media 24/7 so their masters can get the info enabling them to actually come out first with a given story. And B. We’d rather know that what we’re telling you is either true of very likely true before we have to retract an obvious false story, even though another outlet gets credit for “reporting” that false story first. (And rarely retracting the lie later.)
So what you read here is the closest thing you’ll get to the truth, even if we’re a bit late with it. As noted in this fantastic piece via one of our favorite business / muckraking sites, ZeroHedge. (Hopefully, more on this one this weekend.)
We’ll conclude this column right here, even though it may seem a bit truncated. Mr Market’s trying to make a comeback as of 2:50 p.m. ET. The Dow is only down 53 points at the moment, indicating at least some exhaustion on the part of Wall Street’s big sellers. Even the bone-crushing Big Tech avalanche has slowed, with the NASDAQ off “just” 149 points (1.28%) at the moment. The S&P 500 is only off 19.8 points (0.5%). But all this could yet change in the last hour of trading.
Things remain treacherous out there. So we’ll just have to wait and see if the current selling storm persists next week. You never know, as we’re now entering a market season that’s painfully prone to Election Year politics, vicious smears and outrageous lies. Many of which could cause damage to our portfolios, and yours. Or, contrary-wise, could make us all rich beyond avarice.
Of the two alternatives, we prefer the latter.
Have a great long weekend.
– Headline image: Wile E. Coyote apparently grabbed onto the tech-heavy NASDAQ on the wrong day today.
(Warner Brothers cartoon still via YouTube video. Fair use, adapted for satirical purposes by T L Ponick.)