The market opened higher this morning despite a report from ADP that revealed a massive jobs loss in April.
20.2 million payrolls were wiped out last month as Americans found themselves suddenly out of work thanks to COVID-19.
Investors knew it was coming, but the staggering payroll plunge seemed to put a lid on equities at what might be the top of the post-crash rally.
It’s the worst jobs loss measured by ADP, doubling the number of payrolls erased during the entirety of the Great Recession.
“This is what you get when government forces business to close and consumers are fearful to go outside,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said.
“We know, however, that as things reopen, many of these jobs will get restored but certainly to not anywhere near where they stood in February. Let’s be honest, this is a healing process that is going to take years.”
Boockvar raises an interesting point: the idea that the U.S. won’t be able to get all of the lost jobs back any time soon.
States are re-opening, providing at least some employment options for now, but it’s a process that’s currently still in the “baby steps” phase.
“The market is enjoying the economy opening, albeit on a phased-in schedule but that more and more states are opening,” said Quincy Krosby, chief market strategist for Prudential Financial, in an interview with CNBC.
“The numbers in terms of new cases remain at a level that does not, at this point, suggest that the opening is causing cases to rise.”
If COVID-19 cases don’t rise in response to the re-openings, investors should expect states to relax their lockdown guidelines further – something that could lead to a “recovery boom” down the road.
Provided, of course, that Americans feel confident enough to venture out of their homes.
If people remain hesitant to go “back to normal,” little will change.
That could present another big opportunity for one tech stock that’s become extremely popular during the coronavirus pandemic.
Zoom Video Communications Inc. (NASDAQ: ZM), a company that’s been on the lips of nearly every housebound worker over the last few months, has already done very well with COVID-19 shutting down offices around the world.
The stock peaked in April and has since sold-off. Now, however, ZM is rising and is about to breach the 10-day moving average. Today, ZM shares already broke out above the stock’s minor bearish trend (represented with the yellow trendline).
Tomorrow, it could very easily soar once again.
Should ZM rise above today’s high by a significant amount, it might make sense to go long on the stock with a trade trigger of $151.50.
The general market’s rally might be done, but that doesn’t mean ZM will “go down with the ship.”
If anything, this stock has had a mind of its own since the outbreak began, meaning it could be setting up for another “eruption” while most other stocks deflate.
