One important metric that you can watch is weekly jobless claims. It's one of the most frequently released economic indicators. And it exceeded expectations for last week dramatically. We think that it could easily exceed 1 million and possibly even hit 2 million coming up this Thursday. The old peak was 665,000 in March 2009 during the Global Financial Crisis. Just to put it in context, 2 million people filing for initial jobless claims would be 120 basis point increase in unemployment. So that's going to be kind of a good real-time indicator. So that's the first point about what the overall backdrop is in terms of the market and the economy. Number two, I want to tackle sentiment. Obviously, investors are extremely anxious and afraid. We can quantify that a bit. The VIX, which is the implied volatility in S&P 500 options, hit a record high recently, even higher than the Global Financial Crisis. People are taking money out of assets. You can see that with very high correlation between asset classes. Money market funds just a hit nearly $4 trillion, that's up over 20% with the highest weekly inflow ever, including the Global Financial Crisis last week of nearly $100 billion dollars. gold and treasuries to trade down with risk assets, which is unusual. And there's a sign of a liquidation mode. I'd contrast that a little bit with what executives are doing. We look at insider buying from our partner, InsiderScore. They've been looking at this data for over two decades and they're seeing insider buying across market caps the highest in over a decade, and specifically in small caps, the highest ever. Executives at these companies who are seeing real-time fundamentals and are aware of the long-term value of these companies are buying in significant numbers and quantity, while investors are selling. I think that's an interesting dichotomy to be aware of. Moving on to number three--stimulus. Seems like every hour there's increasing amounts of stimulus being announced. Obviously, the U.S. quantitative easing over $700 billion at a faster pace and then QE3. The European Central Bank is on track to purchase €1 trillion by December. And, of course, fiscal stimulus recently proposed in excess of $1 trillion or $1,200 per person. You have monetary and fiscal stimulus. Investors are very fearful. They're selling what they can that's causing, on many days, safe haven assets like
But I would take a step back and look at in the following way. Ultimately, there's a trade-off between the economy and health. And if we want to preserve – keep people as healthy as possible and stop the economy, we can do that. There's a cost to that. In my view, it would be something like $1 trillion a month. I say that because the U.S. GDP is approximately $1.8 trillion a month. And if we're going to stop the economy and many industries are completely stopped, of course, there's going to have to be significant stimulus. So if the government wants to keep things closed and keep people healthy, it can do that, but it's going to need to stimulate. I'm pretty optimistic that the government is in “whatever it takes” mode. I think the government realizes that if the economy is going to be stopped, those stimulus checks have to come. I think the most encouraging score there is that the phase two bill for coronavirus was recently passed by the Senate 90 to eight. There is some bipartisanship, which is, of course, very nice to see and shows that people on both sides of the aisle are willing to do whatever it takes to stimulate. And I think you're seeing some elements of that around the world. I want to address the virus in what we're tracking. First of all, we're very focused on individual country curves. Obviously, the media reports that the virus has been increasing exponentially, and that's of course true. We know from science though that infectious disease doesn't spread exponentially forever. There's what we call an epi curve, where virus transmission increases rapidly, peaks as more people become immune and infected, or in this case, potentially social distancing works to some extent, and then ultimately declines. That's what happens with the flu. It's what happens with all sorts of infectious diseases. Korea and China have already bent that curve and have seen significant deceleration. We’re watching Italy extremely closely. Unfortunately, it's been about 3,000 to 4,500 new cases per day for the past five days. But I would look at that one very closely over the next five days to see if there's some deceleration. I'm hopeful that there will be.