“Aren’t all workers ‘discouraged’ by definition?” – Jason


Hey there carnivores,

Markets were way up BIG on Friday.

And today we’re talking about how the May job’s report flipped the script.

Keep raging,

Jeff & Jason



Just a bit outside

On Friday the US reported the largest monthly payroll gain ever, in the face of some Great Depression-era projections. I love the smell of V-shaped recoveries in the AM.

Economists polled by Dow Jones anticipated the loss of another 8M job, which would have brought the unemployment rate to 20%. That is, if it had come true. In reality, employers added 2.5M jobs last month (📊 in case you were wondering, here’s where the jobs are), the largest monthly number since 1948, dropping the jobless rate to 13.3% for the month of May. Still piss poor for those keeping score at home.

You can’t knock the analyst’s low expectations, considering April posted a 14.7% unemployment rate, the worst since the end of WWII. For comparison, during the financial crisis that spanned December 2007 to February 2010, the US only lost 9M jobs. Let that sink in for a second.

The markets responded as expected… going to the f*cking moon. The Nasdaq climbed to an all-time high, rising 2.0%. The Dow jumped 3.1%, while the S&P 500 rose 2.6%. And bitcoin … jk, no one cares about bitcoin.

On the week, all three indices ended on a high note. The Dow closed up 6.8%, the S&P rose 2.6%, and the Nasdaq jumped 3.4%. Not a bad start to June… anyone with a quarterly performance review would revel in that kind of showing. 

The bottom line…

So, how were the smartest guys in the room so far off? Methodology mostly. April’s 14.7% unemployment rate would have hit 19.7% if one group of workers were counted as out of work for “other reasons” rather than temporary layoffs. 

The number presented in May omits those who are “marginally” connected to the workforce, and those considered “discouraged.”

Including those who were furloughed with benefits and no pay, or paid through the PPP program (read: marginally connected to the workforce), the unemployment numbers could be higher than what we’re seeing. While there’s hope for a speedy recovery, we’ve got a long way to go before things are back to normal, er, the “new normal.”


☑️ Goodnight, sweet prince.

WeWork’s number two announced that he is stepping down at the end of June. Miguel McKelvey is handing in his key card after a ten-year journey that at the very least, can be considered a wild ride. McKelvey is the lesser-known co-founder of WeWork, which arguably, is a good thing. Most recently, he served as the chief culture officer at the company which infamously failed to IPO last year and saw its valuation crater from $47B to $2.9B, per Softbank’s most recent write-down last month.

☑️ Petrol unit.

There’s more good news for oil as OPEC and its allies have agreed to continue production cuts as the world opens back up. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman (read: not the Crown Prince) used the phrase “cautiously optimistic” to describe the deal, but at this point, hey, f*ck it, that’s enough.

The alliance initially agreed to a 9.7M barrel cut that went into effect May 1 and was supposed to decline beginning July 1. The original agreement had output dropping to 7.7M. With the extension, the reduction of output will remain at 9.6M until further notice.

The production output will be reviewed on a monthly basis, with the next meeting coming up on June 18. Of course, one major issue remains… holding countries accountable for their output levels. Just a minor detail.


Another day, another bad retail headline. Go-to retailer of summer interns who got the FT offer, Brooks Brothers, is searching its Rolodex for a financier to help it through bankruptcy. The company is looking for someone to help finance operations while the company “restructures.”

CEO Claudio Del Vecchio has not officially filed for Chapter 11 bankruptcy yet but it is on the table and his team is working on preparing the number needed to keep stores open.

But the retailer might not have as many options even if it does plan to continue offering penny loafers to the masses. Mall owner CBL & Associates missed an $11.8M interest payment on Friday and could be headed for bankruptcy itself. It owns 108 properties, primarily in the Southeast that have been shut down largely due to coronavirus. 

☑️ 16 carats.

Tiffany & Co.’s stock price surged Friday as news broke that LVMH wasn’t going to haggle on the price for purchasing the US jeweler. The luxury brand owner initially made a pre-COVID-19 offer of $16B but was looking for ways to strong-arm Tiffany into accepting a lower price.

Once LVMH’s Chairman Bernard Arnault realized there were “too many legal hurdles” to getting a better price, the company announced it will pay the agreed-upon $135 per share. The deal has not officially closed, and the French retailer will likely keep an eye out for any excuse to lower the purchase price. It’s safe to say, there will be a “global pandemic” clause in all purchase agreements going forward… isn’t that right L Brands? 


Author: Jeff Bishop

One of the best traders anywhere, over the past 20 years Jeff’s made multi-millions trading stocks, ETFs, and options. He is renowned as an incredible trader with a deep insight and a sensitive pulse on the markets and the economy. Jeff Bishop is CEO and Co-Founder of RagingBull.com.

Even greater than his prowess as a trader is his skill and passion in teaching others how to trade and rake in profits while managing risk.

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