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Jobless Numbers, COVID-19, Civil Unrest, and the Stock Market - June 3, 2020

On Friday, the government will release May’s employment data.

  • Per Econoday, economists expect another 7.7 million job losses (on top of 20.5 million in April) and an unemployment rate of 19.8% (vs 14.7% in April).

Another discouraging rise in the jobless rate is anticipated. But its impact on stocks may be muted as investors anticipate an improving economy over the next 6 – 12 months.

Protests

While investors gauge the success of state reopenings, protests have erupted in response to the death of George Floyd while in the custody of Minneapolis police.

  • So far, there has been little reaction among investors.

Historically, investors have looked past unrest.

Protests in the 1960s tied to civil rights, the Vietnam War, and the assassination of Dr. King did little to discourage investors. The same occurred in 1992 when riots followed the acquittal of police officers tied to the beating of Rodney King.

Investor’s corner

We may sometimes see short-term volatility, but past unrest has had little long-term economic impact.

It’s not that investors don’t have a conscience and aren’t unmoved by tragic events. Longer term investment decisions are based on economic events.

Might protests cause a spike in infections and delay reopenings or slow a possible economic recovery? We’ll be monitoring events going forward.

@LWMLLC