(AP/WBEN) - Nearly 3.3 million Americans applied for unemployment benefits last week — almost five times the previous record set in 1982. On the same day, the Dow rallied 1,300 to cap the biggest three-day gain since the 1930s.
How can both happen on the same day?
"Markets do not report on what's happening," said Tony Ogorek of Ogorek Wealth Management. "Markets look through what's happening and look out further. What the market's saying is I got it, unemployment went up… however the government is releasing a combination of fiscal and monetary stimulus that is equalling about $6 Trillion total."
"From an economics standpoint, that's sort of our version of the A-Bomb."
The stimulus helped the markets this week, so did the constant red the Dow had been looking at.
"We had sustained selling," Ogorek said. "I think it got to such a point, that it began to snap back, and that's what we've been seeing over the past three days. My sense is that what we saw was really a relief rally, and the vast majority of times you get a relief rally, you are going to re-test the lows."
Which means the impact of the past two weeks may still be felt.
Revenue has collapsed at restaurants, hotels, movie theaters, gyms and airlines. Auto sales are plummeting, and car makers have closed factories. Most such employers face loan payments and other fixed costs, so they're cutting jobs to save money.
So does the fact that workers who are not on company payrolls — gig workers, free-lancers, the self-employed — aren't currently eligible for unemployment benefits even though in many cases they're no longer able to earn money.
Ogorek believes all of those factors will hit Wall Street at some point.
