“Fast Economic Recovery in Sight”

“Fast Economic Recovery in Sight”

$DIA $SPY $QQQ $RUTX $VXX

Jamie Dimon sees “pretty good odds” of a fast economic recovery starting in Q-3 thanks to the US government’s stimulus programs and the strength of the consumer going into the Medical Malpractice chaos.

You could see a fairly rapid recovery,” the JPMorgan Chase & Co. CEO said Tuesday at a virtual conference hosted by Deutsche Bank AG. “The government has been pretty responsive, large companies have the wherewithal, hopefully we are keeping the small ones alive.”

CEO Dimon, who runs the largest US bank, pointed to economists’ forecasts that show unemployment spiking to around 18% this Quarter, then falling to 14% in Q-3 and declining to about 10% by the end of the year.

In its fast response to the crisis, the Fed has effectively cut interest rates to Zero, pumped trillions of dollars into the economy and announced plans for 9 emergency lending programs, including strong support for small businesses.

Mr. Dimon said he believes that the Fed did the right thing in acting quickly and with what he referred to as “increasingly strong actions.”

This was not the bazooka,” he said. “The Fed took out the whole military and applied it. Just announcing these programs reduced spreads in the market. It’s going to save a lot of small businesses” and it’s “helping people avoid stress.

Many states have begun the process of easing restrictions on businesses put in place to slow the spread of C-19 coronavirus, and “we are already seeing the positive effects of the opening-up taking place, at least for the economy,” Mr. Dimon said.

White House economic adviser Larry Kudlow said Tuesday that The Trump’s Administration is looking carefully at a potential “back to work bonus” to encourage Americans who had been laid off due to the C-19 coronavirus chaos to get off of the dole and return to work.

Mr. Kudlow also said he does not think Congress will approve another $600 per week in extra jobless benefits to laid-off workers in future aid/relief legislation, calling such a move “a major disincentive to go back to work.” 

Contrary to forecasts, Mr. Dimon does not see the flu-like disease necessarily accelerating the digitization of banking, which he said was already happening. Internal data have shown that customers who tended to use digital channels did so increasingly during the last 10 wks, but “folks that are not digital are not exactly picking it up,” he said.

Tuesday, the major US stock market indexes finished at: DJIA +529.95 at 24995.11, NAS Comp +15.63 at 9340.24, S&P 500 +36.32 at 2991.64

Volume: Trade on the NYSE came it at 1.1-B/shares exchanged

  • NAS Comp +4.1% YTD
  • S&P 500 -7.4% YTD
  • DJIA -12.4% YTD
  • Russell 2000 -16.5% YTD

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Very Bullish across the board.

Looking Ahead: Investors will receive the Fed’s Beige Book and the weekly MBA Mortgage Applications Index Wednesday.

Have a healthy day, Keep the Faith!

The following two tabs change content below.

Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge. Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.