I was going to analyze employment data by state, but too lazy. Here's quick summary of April's NFP (source: https://www.bls.gov/news.release/empsit.t17.htm). I renamed and re-grouped some sections.

Not surprisingly, the top 3 hardest hit sectors are either non-essential or include work that cannot be performed from home. Due to social distancing guidelines and impaired demand, we won't get all of the leisure, retail and construction jobs back instantaneously, but if we get 50% of those jobs back upon reopening, 50% of healthcare jobs back, and 20% of the remaining jobs back by late June, we can June's unemployment rate to be around 9% IMO.

Historically, the S&P bottoms far before unemployment peaks. The only exception from this list is 1962. The data goes back to 1948.

2009: The S&P bottomed in March 2009 (most sectors retested lows it made in earlier months), but unemployment didn't peak until Nov 2009.

2002: S&P July-Oct 2002, unemployment July 2003.

1990: No significant selloff in the S&P

1982: S&P Aug, unemployment Nov.

1974: S&P Sept, unemployment May 1975.

1970: S&P May, unemployment Dec

1962: S&P June, unemployment July 1961.

1957: S&P Oct, unemployment July 1958

1953: No significant selloff in the S&P

1949: S&P June, unemployment Oct

Source: https://data.bls.gov/pdq/SurveyOutputServlet

Default risk free not interest rate risk free. If buy a 30 year treasury yielding 1.3% or so and the bond falls in value to yielding 3%, you will get your 1.3% if you hold on to it.

Saw some info where long end treasuries have outperformed the S&P 500 over the last 20 years. Ditto long end AAA corporates. There is a pretty well known debate in finance regarding the equity risk premium observed in relationship to bonds as to whether or not it is justified. Yields on the long end are volatile too. We have had like a ~40 year rally in the long end.

I was having a think, in my typical genius manner, and it seems very unlikely to me that stocks (let's just say SPX), will undergo a significant pull-back (say, 20%), for at least the next couple years. And I think the pull-back drought will likely last a lot longer than that if the predominant zeitgeist in politics continues, which I think it will—now that the plebs' appetite for free money has been whetted with stimulus checks, good luck to anyone trying to run on a platform of fiscal responsibility. I think the next couple years are likely to see continued stimulus payments and bailouts, and possibly even cancelation of student-loan debt. And while canceling debt might seem bad for lenders, I assume the government's solution would be to just print more money to pay the lenders with.

The Fed has said they won't raise rates until at least 2023, so that removes a big downside catalyst. I think printing trillions every year will catch up with us eventually and we'll see significant inflation, but in the medium term, it'll be captured mostly by the market. It's conceivable that kill-the-rich tax hikes (corporate rate, Bernie's 'speculation tax, Warren's taxing of unrealized capital gains) could tank the market, but who in power wants to see their stocks go down? And who wants to tell people that the government can't support them with free money, especially when their opponent is promising $1000 a month and cancelation of debts? The incentives seem so favorable to profligate spending that I don't see how stocks can get back to historical P/Es. I realize that these incentives are nothing new, but I think people, and hence whom they elect, are just less responsible, more entitled, and less concerned about future generations than they used to be. So the forces that used to temper profligate spending/printing with objections that we can't afford it, get run shouted down by the progressively socialist tech and media platforms.

So for some sucker like me who's sitting largely in bonds, sick at the notion of buy-and-holding SPX (which now entails owning TSLA) at these absurdly frothy levels, I don't know what the game plan is. Is the play actually to take all the money I have in cash/bonds and buy a bunch of random SPACs that are between $10 and $11? Is that the world we live in, where bond yields are so paltry and the market is so juiced that SPACs are the new T-bills?

rest of world is relatively cheap if you don't want to ride the mania.

Bonds have sucked for almost the past 2 decades. Curious why you are just coming to that realization today.

10 year strips since 2000 gained about 150%. Obviously less than S&P but risk adjusted its not bad.

The idea isn't that you just hold bonds indefinitely. You make a risk–reward assessment on where to park your cash with respect to equities. If two decades ago, as the tech bubble was starting to burst, you saw that the SPX's P/E was in the mid 30s, and 10-year treasuries were yielding over 6%, it was very reasonable to wait in treasuries until a correction. Then the Fed lowers rates to help the market, and your bonds rocket up in value, and then you buy stocks at reasonable valuations. That's the idea. And it worked for the GFC too. So holding bonds over the past couple decades has been a very reasonable strategy, especially for more risk-averse people. It's only in the past few years, with rates at or below 1%, that I think it's not justifiable for a typical investor.

I don't really understand the dynamics of how the rising interest rates are killing bubble stocks. My understanding was that no one wanted to buy bonds because there's so much money to be made in stocks and VC and crypto and metals. Since the demand for bonds is so low, the yields of the bonds have to rise to attract buyers, and that's why we see rates going up. But the yields are still garbage—people are really selling out of their positions in SKLZ and TSLA to buy a 10-year bond that yields 1.37%, all the while predicting that inflation is going to soar? If inflation is going to soar, getting 1.37% is terrible.

So it's hard to believe money is flowing out of stocks and into bonds (or worse—cash). Crypto is also down. It looks like money is flowing out of bubble stocks and into defensive stocks (T, MO, KO), but I don't really understand that either. If money is going to be super cheap because of inflation, how does that hurt bubble stocks? Is it because it will be harder to get new loans at low interest rates? It seems like that would be offset by the fact that these growth stocks already have a bunch of debt, and that debt would diminish in an inflation scenario. (If you owe $2b, and inflation goes up 100%, now you effectively only owe $1b.)

Can somebody 'splain me?

The easy explanation is that financial writers get paid to write financial articles

Given the significant increase in commodities prices (oil, tin, aluminium, sugar, corn, wheat, coffee, ...) and little inflation, who is paying the difference?
When is the consumer gonna start paying it (fully)?

1.) Think of bubble stocks as ultra high duration cashflows as the meat of their earnings for their 'Present Value' are 10 year+. Higher rates wreck long duration cashflows from a discounting perspective.

2.) As you mention, more expensive financing of their cash burn.

3.) Right now, no place to invest safely with negative real rates. Once rates are high enough, fixed becomes are a viable alternative to preserve wealth.

4.) Higher rates historically indicated the economy coming back, so a rotation from tech promises to the "real" economy (smallcaps + consumption).

But as I also mentioned, it seems like that would be offset by the fact that these growth stocks already have a bunch of debt, and that debt would diminish in an inflation scenario. And if you take something like TSLA, at least for the bulls who hold the stock, they don't think they'll have to raise anymore. I'm not seeing companies with high debt who aren't likely to need to raise doing well while companies that are likely to need to raise sell off—it just looks like everything high-beta is selling off. Maybe I'm wrong about that though; that's just my impression.

I assume you mean without negative real rates. And while I agree with this sentiment, it doesn't describe what's happening. The bond yields aren't rising because of high demand from people shifting toward fixed income; it's the opposite—bond yields are rising because nobody wants them. And throwing an extra twenty basis points on the repulsively low 1.25% yield, when fears of inflation are rampant, doesn't seem like it would entice anyone.

4.) Higher rates historically indicated the economy coming back, so a rotation from tech promises to the "real" economy (smallcaps + consumption).[/QUOTE]

The economy coming back seems as much of a bull argument for the froth stocks (TSLA, SKLZ, CCIV) as anything else. People will just have more money to speculate with and to meet the chimerical revenue projections needed for their valuations.

So consumers started to pay the difference.

Commodities are still nuts but most topping soon?

Probably not .
Unless you think stimulus check and infrastructure investments are over soon.

Fwiw , my feeling is that the fed will let inflation run , producing enough nominal earning for corporations , until corporations decided to hire people and raises the wages enough so that people go back to work in a sustainable economy .

Anyone have any hot takes on the whole Afghanistan situation? This could have huge ripples. I figure Biden is no better than 50/50 to remain in office by the end of the year. Does Harris make any difference? Do China and/or Russia start making moves thanks to all of the US turmoil and what if anything does this do to the markets? This feels to me like one of those "Oh ****! I shoulda saw that coming!" events that will seem obvious after that fact. Just can't see what exactly right now.

Then again what the hell do I know? Sunday futures open flat not all that far from all-time highs.

You would think that if Afghanistan made any difference to the markets, that it has had ample times to do so over the past few hundred years as various nightmare scenarios have taken place there.

Not sure why you think that Biden would leave office over it, unless you think the stress is going to give him a heart attack. We don't remove Presidents because of people dying.

As the US shuffles out of Afghanistan the ripples will reverberate over and over in probable ways and also in unknown ways throughout the region and in the US.

See Edward Gibbon for more information.

Revelations