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J.P. Morgan: Market Usually Goes Up After Major Unemployment Spikes |
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| Jun 09, 2008 02:26 PM UTC |
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Tracked Blogger
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6/6 - "JP Morgan put out a note this afternoon saying that the market is taking the 0.5% jump in unemployment the wrong way and is overreacting...On average, the DJIA gains 30% (!) after a 50ps increase in unemployment according to JPM. In the 16 times this has happened since 1950, the market has NEVER been down 12 months later, with a minimum gain of 10% and a max of 44%. The six-month gain averages 16% and the 3-month gains averages 10% (and losses only occurred one time in each case, equaling -6% and -2% respectively)." "This hardly seems like a trend to bet against. To do so you have to believe that "this time it's different", even if those are the four most dangerous words in investing..." 
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