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🎙"He would probably say that if death had to come, I am sure there was no greater cause to die for than fighting to get a just wage for garbage collectors." - See who said it and why it matters at the bottom.
Illustration: Eniola Odetunde/Axios
The stock market continues to bounce back and analysts and investors are lining up on opposing sides of the market's big new question — whether stocks have hit the bottom.
On one side: The rebound from this recession may come at warp speed because the fall came at warp speed, Jim Paulsen, chief investment strategist at the Leuthold Group, tells Axios.
What it means: In a typical recession, economic data slowly start to worsen and often the stock market reacts slowly to the evidence.
On the other side: The damage from the pandemic and nationwide business shutdown is not yet quantifiable, and companies have provided no numbers to suggest that the hits they've taken to their earnings even justify the market being as high as it was on March 23.
Plus, the market's 23% rise since March 23 is actually a contrarian indicator, Levine argues.
The big picture: Bullish investors are starting to dip their toes back into the market, bears are still expecting the worst, and sentiment is being wholly dictated by the latest developments of the coronavirus. That means big moves are likely to continue for some time.
The VIX, which tracks the stock market's expectations of volatility based on S&P 500 index options, has been consistently declining from the record high of 85 it touched on March 18 to just over 43 at market close on Wednesday.
Senate Majority Leader Mitch McConnell is expected to put legislation that adds $250 billion to the $350 billion small-business loan program to a vote today. (Politico)
President Trump said yesterday he wants to reopen the economy with a "big bang" but may do it in phases. Trump's chief economic adviser, Larry Kudlow, said Tuesday it was possible this could happen in four to eight weeks. (Reuters)
The minutes from March's emergency FOMC meeting showed members all agreed that the effects of the coronavirus would weigh on economic activity in the near term and that the duration of this period of weakness was "uncertain ... and unpredictable." (FOMC minutes)
The Fed will temporarily lift Wells Fargo’s growth restriction put in place after the bank’s customer abuse scandals, but said the bank has "not satisfied all of the requirements for removal of the asset growth restriction." (Axios)
The $2.2 trillion CARES relief bill is helping existing homeowners but also causing dislocations in the U.S. mortgage market. This, combined with the coronavirus pandemic, is weakening access to and demand for mortgages even with rates at record lows.
Why it matters: In addition to the expected downturn in the housing market from nationwide shelter-in-place orders, the current shock is making it harder and more expensive for individuals, especially those with lower credit scores and less cash, to get a mortgage.
What's happening: As a result of the CARES Act provision allowing delays in mortgage payments for borrowers with government-backed mortgages of at least 90 days and up to one year, forbearance requests are pouring in at an unprecedented rate.
By the numbers: Forbearance requests rose by 1,270% between the week of March 2 and the week of March 16, and another 1,896% between the week of March 16 and the week of March 30, MBA reported earlier this week.
What we're hearing: Many first time buyers and those with mortgages insured by the Federal Housing Administration or so-called high-balance or jumbo loans, "are going to see higher rates," Mike Fratantoni, chief economist at the Mortgage Bankers Association, tells Axios.
Axios' Kim Hart writes: As many as one-third of U.S. jobs may be vulnerable as a result of the coronavirus pandemic, and it will disproportionately displace low-income workers that do not have the financial cushion to absorb the economic blow.
The latest: According to an analysis by McKinsey Global Institute, up to 86% of the vulnerable jobs paid less than $40,000 a year, and almost all (98%) of at-risk jobs paid less than the national living wage for a family of four ($68,808).
"It's quite striking how widespread the vulnerability is. This is going to be a workforce disruption larger than any of us have lived through."— Susan Lund, McKinsey
By the numbers: An estimated 13.4 million vulnerable jobs are in the restaurant industry.
The potential job carnage spreads far beyond the service industry, affecting builders, transportation services, health aides, mechanics, social workers and some business and legal jobs.
A separate Brookings Institution report found that the workers most vulnerable to job loss are those with a high school diploma or less. About half of low-wage workers are either primary earners or contribute substantially to paying family expenses.
Depending on the region, Brookings found between 30% and 62% of workers earn low wages — with median hourly earnings ranging from $8.40 to $12.65. (This interactive tool lets you drill down into metro area.)
Quote: "He would probably say that if death had to come, I am sure there was no greater cause to die for than fighting to get a just wage for garbage collectors."
Why it matters: On April 9, 1968, Morehouse College president Benjamin Mays delivered the eulogy for Martin Luther King Jr., who had been murdered five days before in Memphis.
Read the full eulogy.