“But most investors do capitulate eventually. They simply run out of the resolve needed to hold out. Once the asset has doubled or tripled in price on the way up — or halved on the way down — many people feel so stupid and wrong, and are so envious of those who’ve profited from the fad or side-stepped the decline, that they lose the will to resist further. My favorite quote on this subject is from Charles Kindleberger: “There is nothing as disturbing to one’s well-being and judgment as to see a friend get rich” (Manias, Panics, and Crashes: A History of Financial Crises, 1989). Market participants are pained by the money that others have made and they’ve missed out on, and they’re afraid the trend (and the pain) will continue further. They conclude that joining the herd will stop the pain, so they surrender. Eventually they buy the asset well into its rise or sell after it has fallen a great deal. In other words, after failing to do the right thing in stage one, they compound the error by taking that action in stage three, when it has become the wrong thing to do. That’s capitulation. It’s a highly destructive aspect of investor behavior during cycles, and a great example of psychology-induced error at its worst.”
― Howard Marks

1. Trump Threatens to Use Troops to Crush Unrest in U.S. Cities — Trump on Monday night called on governors and mayors to “dominate the streets” and announced that he was sending thousands of heavily armed military personnel into the nation’s capital after days of violent outbursts following the death of George Floyd, an unarmed black man, at the hands of Minneapolis police. Trump was considering invoking the Insurrection Act. That 1807 law, previously used to intervene during the 1992 Los Angeles riots, allows the president to federalize the National Guard and bring in the U.S. military if states are unable to safeguard constitutionally protected civil rights.
2. Roche Test for Severe Covid-19 Gets Emergency FDA Approval — the blood test, called Elecsys IL-6, can identify patients who carry the virus and who may develop respiratory distress and require intubation within 18 minutes. Some patients develop a severe inflammatory response called a cytokine storm, which can be deadly. The test attempts to pinpoint those most at-risk people early by measuring levels of interleukin 6 in the blood, a marker for acute inflammation. The protein acts as a messenger from some immune cells to rouse others against the infection.
3. U.S. Job Cuts Shows a Drop of 2.76 million in payrolls is one-third of forecast — The 2.76 million decline in business payrolls last month followed a revised 19.6 million decrease in April, according to ADP Research Institute data released Wednesday. The drop in May was smaller than all but one estimate in a Bloomberg survey of 39 economists. The median projection called for a decline of 9 million.
4. U.S. regains 2.5 million jobs in May, unemployment falls to 13.3% — The U.S. regained 2.5 million jobs in May and the unemployment rate fell to 13.3%, confounding Wall Street expectations for another big wave of layoffs and signaling the economy began to revive last month after probably the worst economic crisis in American history since the Great Depression of the 1930s. Those jobs tilted toward full-time, which added 2.2 million , while part-time workers gaining jobs numbered 1.6 million. Leisure and hospitality workers made up almost half the increase last month, with 1.2 million going back to work after a reported loss of 7.5 million in April. Jobs in bars and restaurants increased by 1.4 million as states began to relax social distancing measures. Construction was the next biggest gainer with 464,000, making up for about half of April’s losses. Education and health services rose by 424,000 and retail surged by 368,000 after plunging by 2.3 million a month previous.

The week ahead — Economic data from Econoday.com: