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Elon Musk summed up the markets perfectly yesterday morning. And he didn’t even need all 280 characters: “lol”.
On Thursday the Dow fell 6.9% (not nice), while the S&P and Nasdaq fell 5.9% and 5.3%, respectively. For those of you that recently deleted DraftKings and downloaded Robinhood, that’s bad. Like really bad. In fact, it was the biggest one day decline since March 16 when all three indexes fell over 11%.
What went wrong?
Well, for starters, J-Poww started running his mouth again…
Late in Wednesday’s session, Fed Chair Jerome Powell jumped on his OnlyFans live feed to recap the Fed’s two-day meeting. JP indicated that the pandemic could cause permanent economic damage and that the US economy will contract by 6.5% in 2020 before expanding by 5% in 2021.
Additionally, Jerry Interest Rates said that the high percentage of unemployment (currently around 13%) will likely persist through the end of the year. Oh, and Jer says we can expect near-zero interest rates through 2022, which means the central bank doesn’t have a whole lot of confidence that a V-shaped recovery is on its way.
It isn’t just the Fed’s sweet nothings that had investors heading for the exit…
‘Rona boi is back. Texas posted its third straight day of record hospitalizations… which just goes to show that dying for the Dow doesn’t necessarily mean it’ll go up. Elsewhere, Florida had its worst weekly increase. Nationwide, the US’ grand total of coronavirus cases eclipsed 2M.
That being said, Treasury Secretary Steven Mnuchin doesn’t see lockdowns in America’s future, stating ‘we can’t shut down the economy again’. We’ll see what Dr. Fauci has to say about that.
The bottom line…
Is it just me or is it getting a little frothy in here?
It appeared that there was no limit as to how many thousandaires Robinhood could mint. You see, retail investors had been living large, piling into beaten-down stocks, and making billionaires look like simps over the past few weeks. That is until today.
The most-bought stocks on Robinhood (many of which were companies negatively impacted by COVID-19… or seeking bankruptcy protection) were all in the red Thursday. Granted all stonks were so that doesn’t say much. The most popular stock on RH, Ford, was down 9%, while the two others on the podium, GE and American Airlines, fell 8% and 14% on the day.
Water Cooler Talking Point(s)
💧 “Sooo, is summer canceled again?” (Nick, The Water Coolest HQ)
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