Good morning, Bull Sheeters. Early gains are starting to fade, but investors seem unfazed by last week’s grim job numbers.

Let’s see where investors are putting their spare cash.

Markets update

Asia

• The major indices are mixed to start the week. Japan’s Nikkei and Hong Kong’s Hang Seng were up; Shanghai was narrowly lower.
• New follow-the-money data reveals Chinese investment in the U.S. is down significantly so far in 2020; looking the other way, U.S. companies are investing in China at nearly the same clip as a year ago. Watch for this investment gap data to get some attention in Washington.
• Complicating matters, the Trump Administration wants U.S. companies to ditch Chinese suppliers and completely rethink their supply chains.
• There are at least two new clusters of COVID-19 infections in Wuhan; South Korea too is trying to corral an outbreak linked to a “party” district in Seoul.
• Rocked by low oil prices, Saudi Arabia is instituting 100 billion riyals ($26.6 billion) worth of austerity measures to shore up state finances. The Saudi stock exchange, the Tadawul, was down about 3% on the news.

Europe

• European bourses were higher out of the gates, before sinking. London’s FTSE was clinging to gains, while the benchmark Stoxx Europe 600 dipped into the red in the second hour of trading.
• The sparks continue to fly across the EU. The European Commission has warned Germany it may sue over last week’s German high court ruling challenging the ECB’s monetary authority. Reminder: the German court ruling could really mess with the central bank’s ability to roll out QE stimulus in a time of crisis.
• “The final word on EU law is always spoken in Luxembourg. Nowhere else,” Ursula von der Leyen, the German-pol-turned-EC-president, said in defense of the European Court of Justice.
• Further rollback of lockdown measures go into effect in France today.
• Meanwhile, the COVID-19 death tolls in France, Italy, Spain and the U.K. fell over the weekend to the lowest levels since March as Europe proceeds with its plan to gradually restart the economy.

U.S.

• The Dow, S&P 500 and Nasdaq futures have been up and down all morning, but are now solidly negative.
• The Nasdaq aims to extend its rally to a sixth day today. The tech-heavy index is up 1.7% year-to-date.
• “The worst is yet to come,” Minneapolis Fed’s Neel Kashkari warned on Sunday following the latest unemployment figures. The noted dove wants Congress to pass another stimulus package to help Americans and businesses.
• House Speaker Nancy Pelosi appears ready to answer that call. The House is expected to release a draft this week of a giant new stimulus bill, which could include at least $750 billion in aid to state and local governments, and individual Americans.
• Baseball fans, MLB will meet today to discuss a possible resumption of the season. If the German professional soccer season can restart (or at least, discuss restarting), surely baseball can. Abolish mound visits, I propose.

Elsewhere

• Gold is down.
• The dollar is up.
• Crude is down. WTI had its second best week of 2020, climbing $25%. It’s down close to 3%, however, slipping back below $24/barrel.

Wipeout

The Dow Jones Industrial Average climbed 455 points on Friday, closing up nearly 2% on the day. It’s now 33.5% above its mid-March low. In that time, millions of Americans have lost their jobs, companies have filed for bankruptcy or gone bust, and economists have revised downward their growth forecasts for 2020.

Losing 20.5 million jobs (and the real decline is probably worse that that) is bad, but just how bad? The wipeout is more or less equivalent to the destruction of all the jobs gained over the past decade. The greatest jobs-creation boom in American history is over. It took just one month.

The most optimistic observer will tell you these jobless numbers, as bad as they are, are a bit skewed. There is a larger than usual tally of temporary jobs lumped into that number, they note, and that, once the economy starts to reopen, the out-of-work will get back to their jobs and the unemployment rate will sink again. But many economists aren’t so sure.

As Berenberg told investors in a note on Friday afternoon, “The number of persons on temporary layoff/furlough increased by 16m to 18m in April, accounting for the bulk of total unemployment. Some of these persons will return to work once businesses reopen, but some temporary layoffs will become permanent as businesses face soft demand, close permanently, or as they operate at reduced capacity to ensure social distancing.”

For now, the markets are taking the optimistic view. The huge gains in equities in recent weeks suggests investors see the job losses, the furloughs, the business closings—historic as they are—as a temporary setback. They’re confident the trillions committed in stimulus measures will act as a safety net for the consumer, the engine of the economy. And thanks to the Fed’s super accommodative policies, equities look like a can’t-lose bet.

Still, it’s an investment strategy that involves some risk. The recovery is dependent upon public health conditions improving. It’s also dependent upon public confidence improving—confidence that it’s safe to go to work, to go back to school, to take public transportation, to go shopping or dine out. This return to normal could be frustratingly staggered. It will be uneven across regions and industries.

Until then, investors will be focusing on the progress we’re making to get back to normal. It will be choppy. As such, U.S. futures are faltering, as I type.

***

Postscript

On the weekends, I usually get up early, pop on my bike and pedal out of town. The route involves cutting past the early-Christian catacombs, cycling by the ancient villas on the Appia Antica, and following the aqueducts towards the Castelli Romani, the volcanic cone that looms above the city.

Even under the more relaxed lockdown measures, much of my favorite route is still cut off. The catacombs leg is off-limits, for example. And on Saturday, police were patrolling the parks with such rigor that I was forced to make a series of detours to get to where I wanted to go.

It was good to be out on my bike though.

In early March, the city closed the parks, and any excursion far from home was a fine-able offense. Those measures were relaxed last Monday, May 4. And so it was good to see the Eternal City up close, astride two wheels.

Next Monday more openings are scheduled, including the entry into the catacombs. Non vedo l’ora, as the Italians say. I can’t wait!

Have a nice day everyone. I’ll see you here tomorrow.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

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Today's reads

Attention, Disney shareholders. It's been a little over a year since Disney landed the mega studio, 21st Century Fox, for a whopping $71.3 billion. Was it worth it? Fortune's Shawn Tully pores through Disney's latest financials (from last week) and reaches a verdict Disney shareholders probably won't care for. 

A buyer's market? You'd think with mortgage rates at these rock-bottom lows it would be an ideal time to trade up your rental for a new home. Not so fast. Lenders have dramatically tightened credit requirements, locking all kinds of homebuyers out of the market. One model shows that mortgage credit availability has plunged by more than 25% since the U.S. outbreak of the coronavirus.

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A to Zoom

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