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A day after the market plunged on worse than expected inflation numbers for April, today, May 12, stocks moved up to recover part of their drop on another decree in the weekly initial claims for unemployment numbers.

For the week ending May 8, seasonally adjusted initial claims for unemployment in regular state programs was 473,000. That’s a decrease of 34,000 from the previous week’s revised level. And it’s the lowest level for new claims for unemployment since the week of March 14, 2020. (That’s before the pandemic recession really hit full speed.) For the week of March 14, 2020, initial claims for unemployment wee 256,000.

The four-week moving average for initial claims–economists like to track the four-week moving average because it evens out some of the week to week fluctuations in this number, fell t5o 534,000, a decrease of 28,250 from last week’s moving average. This is the lowest level for the four-week moving average since–you guess it, March 14, 2020.

On today’s news that the economy isn’t headed down the drain and that the week April jobs number (the U.S. economy created on 266,000 jobs in April) may not be indicative of a slowdown in the economic recovery, stock moved up strongly to recover part of yesterday’s drop. The Standard & Poor’s 500 gained 1.22% by the close (after dropping 2.14% yesterday.) The Dow Jones Industrial Average was higher by 1.29% today (after dropping 1.99% yesterday.) The NASDAQ 100 gained 0.83% today (after dropping 2.62% yesterday.) And the Russell 200m small cap index was ahead 1.68% at the close (after dropping 3.26% yesterday.)

I’d have to say that the damage from yesterday’s big ramp up in inflation fears lingers.

The CBOE S&P 500 Volatility Index (VIX), which climbed 19.73% yesterday to 26.15 as investors and traders bought hedges against a further market drop, gave back part of that gain. The VIX closed today at 23.11, down 16.24%. But that’s still far above the 16.69 for the VIX on May 2, a little more than a week ago.