Economic Data Is Bad, But That’s Not What’s Worrying Investors05/14/2020

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Equity markets are retreating for a fourth consecutive day as dreadful economic data continues to be released. Initial jobless claims for the past two months are near 37 million. To put this in perspective, we gained 22 million jobs over the just-ended 11-year economic expansion, which was the longest on record. However, this horrendous news was expected, and investors have been largely looking past bad economic data and to a future economy full of trillions of dollars in fiscal stimulus and record-low borrowing costs. Optimism was relatively high and a V-shaped—or quick—recovery was being priced into markets. The recent market weakness isn’t due to the economic data but other factors, which we think point more to the slower U-shaped recovery that we have been anticipating.

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Commentaries are published by Cetera Investment Management LLC, an SEC registered adviser owned by Cetera Financial Group. Cetera Investment Management provides market perspectives, portfolio guidance, model management, and other investment advice to its affiliated broker-dealers, dually registered broker-dealers and registered investment advisers.
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