The story (before the big rally on Friday):
The S&P 500 has returned 37.7% over the last 50 trading days, making it the benchmark index’s largest 50-day rally in history, according to LPL Financial.
And if history is any indication, there could be more gains ahead.
Looking at the other largest 50-day rallies, the firm found that stocks were higher 100% of the time six and 12 months later. The average 6-month return was 10.2%, while the average 1-year return was 17.3%.
The firm crunched the data going back to 1957, which is when the index moved to a 500-stock model. [Link]
Another piece of news:
Using data from the timesheet company Homebase, University of California professor Jesse Rothstein and colleagues have identified businesses that shut down and are now reopening in real time. “It’s giving us a sense that reopening has gone faster than I anticipated. I would not have guessed that such a large share of firms have reopened at this point.
The most recent update from Rothstein and his colleagues using the Homebase data shows that about half the businesses that did shut down have reopened. “Reopened firms had collectively regained over half of their baseline hours and nearly 60 percent of their baseline employment levels. Almost 90 percent of this reemployment came through rehiring employees who worked at the firms before they shut down, as opposed to new hires,” he said. [Link]
Another piece of news:
Whether deemed essential or not, workers are being pushed by public policy and financial necessity back into restaurants, bars, stores, offices, warehouses, work sites, and factories. [Link]
(1) The jobs report, as an aside, was again skewed by reporting irregularities. Not just that, the payroll pop seems to reflect businesses re-hiring so as to get the PPP loans switched to grants. So put away that champagne! [Link]
(2) The CBO took a butcher’s knife to the 10-year US GDP outlook — $16 TN hit from the pre-Covid baseline trajectory in nominal terms. But hey — buy stocks! The SPX should now be valued on helium per share. [Link]
(3) Just imagine that most regular forecast forward earnings in the S&P 500 of 100 dollars a share. That would mean that at current prices the valuation goes up over 30 times. This is pretty mad. It‘s just an example of how markets are manipulated by central banks through quantitative easing. It’s so extreme, such a grotesque distortion that it’s almost embarrassing. [Link]