Market Daily Review: June 11/2020 Last week the market was risk-on and we saw the treasury market sell-off into key levels. At the same time, the equity markets were celebrating a strong jobs report. Only until yesterday, did the Fed provide a statement on their projection of the economy. These statements all but confirmed the V-shaped recovery will not happen. Even more revealing is that the Feds are projecting a slow recovery path. It is widely acknowledged that the current market rally is artificially induced by the Fed stimulus and the re-opening of the economy. The disconnect between what is happening on main street and wall street is evident. As of this writing, 40 million people in the US have filed for initial unemployment claims. And there are reports coming out risks for a second COVID-19 wave hitting the economy are high.

A Tale of Two Economies “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness,” The Tale of Two Cities by Dickens in fact poignant when we look at what is currently happening in the US. The Reign of Terror according to Wikipedia was a result of Enlightenment “thought which emphasized the importance of rational thinking and began challenging legal and moral foundations of society, providing the leaders of the Reign of Terror with new ideas about the role and structure of government.” We are seeing this now in our streets with the protests sparked by the killing of Floyd. These have resulted by a two class society similar to that of pre French Revolution Paris. Yesterday we are told that the economy is recovering faster than expected and that the stock market it up, yet we have people in the streets trying to exercise their rights while being tear gassed. So what is the truth?