June 16, 2020
Last Friday’s news of a drop in the unemployment rate to 13.3% and an increase of 2.5 million in employment was unexpected good news (see the US Bureau of Labor Statistics’ (BLS) recent Employment Situation Summary). The US stock market promptly rallied, and on Monday, June 8, the S&P 500 Index surpassed the level at the end of 2019, erasing all of the losses in March and April. But neither the employment report nor the stock market rally should be taken as evidence that the pandemic recession in the US is over or that the US tech market will recover in Q3 or even Q4 of 2020. Unfortunately, other signs suggest that what we have called Scenario A — a short recession and a quick rebound in tech spending in 2020 — still remains a lower probability than Scenario B, with a long recession and a prolonged downturn in US tech spending until 2021.
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