Jobless claims skyrocketing ? Markets don’t care. Pandemic killing the world and the U.S. economy? Markets don’t care. Most businesses shutting down? Markets don’t care. Airlines and Boeing having more problems? Markets don’t care.Lousy earnings report? Markets don’t care. America is in a debt stranglehold? Markets don’t care.
The U.S. department of labour reported another shocking level of unemployment claims on Thursday even after nearly 10 million people already applied for benefits in the previous two weeks . In the week ending April 9, the advance figure for seasonally adjusted initial claims was 6,606,000, a decrease of 261,000 from the previous week’s revised level.
The number will likely keep increasing as long as there are enough workers to furlough. Besides this many states are still clearing out backlogs of applications for unemployment aid. The jobless claim number is limited by the system capacity. The real numbers are much higher.
But one place where these numbers make no sense is Wall Street. Stocks seem to be gaining strenght each time the rest of the U.S. gets jobless claims shocker. Have you lost you job lately? Yes? Well, tough on you, stocks are going up.
It makes sense that pharma related stocks, such as Tiziana Life Sciences PLC (NASDAQ:TLSA) which is developing tech for the potential treatment of COVID-19, are going up as we are in times when our health is what we think about all day long.
But why is American Airlines Group (NASDAQ: AAL) going up? J.P. Morgan analyst downgraded AAL to “underweight” (meaning it is pretty much worthless at the moment) and American Airlines also is cancelling more flights to and from New York City area airports due to “rapidly evaporating” travel demands. So, there are no flights, no passengers, airlines are burning more than $50M per day...and stocks are going up?
At least Delta Air Lines, Inc. (NYSE: DAL) is still hovering around $20, its 7 years low levels. After Warren Buffett sold some of its DAL stocks the share price seem to be nailed to the bottom. This is the new norm. If Warren Buffett sells some company’s stocks, the price of these shares is doomed.
No furlough or jobless claims or massive amount of debt can do to your stock what Warren Buffett can.