OK Wall Street: Why Millennials May Be Driving the Market Surge | Opinion

Okay, welcome back to On The Street. Another great week for stocks. The S&P 500, my favorite market index, was up 1.9 percent. But don't get too cocky, investors: another 1.5 million folks filed for unemployment benefits last week. Yeah, I know—retail sales soared in May. But just wait until the enhanced jobless benefits run out, or are slashed, at the end of July. But enough of the doom and gloom. This week, among other things, I have a few thoughts on millennial investors, Fed Chair Jerome Powell as the skunk at President Trump's garden party, and over-hyping economic stats. (I guess that's kind of doom and gloom, come to think of it.) Let's start with those pesky millennials:

OK WALL STREET: I guess it's bad form for a columnist to admit he or she doesn't know what to think. But, when it comes to the recent day-trading boom/rumpus, I'm a little lost. Interesting story, though. There's been a lot of speculation about why the market has come back so strongly after its low in mid-March. One theory: the stock rally has been driven by millennials who used their $1200 stimulus checks to dive in. The ring leader: the retail trading app Robinhood, which now has about 10 million users from about a million in 2016, says CNBC's Kate Rooney. The median customer age? 31. Another angle: Because of COVID, young sports betters had no way to feed their habit. So, they're turned to stocks. For instance, the fans of the cheeky sports web site, Barstool Sports, led by founder Dave Portnoy, a.k.a., "Davey Day Trader." Young, crazy investors like these, the story goes, descended on COVID-troubled stocks such as Spirit Airlines and Hertz and made a bundle. For kicks—and entertainment value—Portnoy even trash-talked Warren Buffett, saying that he is out-Buffetting the Oracle of Omaha. So, what to think? Well, it's pretty cool that there's a new generation of investors. (Except for Portnoy, who is 43.) But enjoy the Robinhood Rally while you can. I guess, boomer-style, I'm with "Smitten with the Mitten," who said on a Yahoo! Finance Forum: "When I start to think that I am a better investor than Warren Buffet...we are at a market top." Enjoy the Robinhood Rally while you can.

POWELL POWER: I watched a good portion of Fed Chairman Jerome Powell's testimony before the House Financial Services Committee last week. I must say, it was refreshing to see lawmakers just doing their jobs without partisan grandstanding or obstruction. (Holy Mitch McConnell, Batman!) Other takeaways: Powell said we're clearly into recovery-mode, but warned that health and the economy go hand in hand. If COVID cases continue to spike? Businesses that depend on keeping us six feet apart—big employment sectors like airlines, retail and restaurants—are going to struggle big-time. Also from Powell: he urged Congress to consider more aid for the unemployed and state and local governments that have weathered big pandemic budget shortfalls. (Some 1.3 million state and local government employees lost their jobs in April and May.) "It will," Powell said, "hold back the economic recovery if they continue to lay off people and if they continue to cut essential services." In other words: don't make the same mistake we made during the Great Recession and pull back on the reins too soon.

BEWARE THE HYPE: The announcement last Tuesday that month-over-month retail sales were up almost 18 percent in May launched one of the biggest over-reactions ever—right up there with the improved unemployment numbers last month. Finger's crossed, but there are no signs yet that this indicates anything other than—duh—a lot of states re-opened their economies at various times in April and folks started spending. So, is it any surprise that gasoline outlet sales rose 13 percent? Or restaurant sales jumped 29 percent or, apparel purchases soared? (I didn't get furniture sales rising 90 percent, but I guess there was pent-up demand for coffee tables.) Keep this in mind: the jump followed three consecutive months of down retail numbers following, what my Newsweek colleague Bill Powell called, a medically-induced depression. Also, as the WSJ points out, May sales were $486 billion compared to $527 billion in February. So, big deal. But, sure, up is better than down or flat and all that. But if you're investing/gambling in the markets off the May data, beware. As I write this, COVID-19 cases are rising in a number of states and there's unrest in major cities, in case you haven't noticed. And a lot of folks have already spent their stimulus checks on, I guess, coffee tables—or penny stocks on their Robinhood apps.

LOOSE CHANGE: Wondering why Treasury Secretary Steven Mnuchin was—until a compromise was reached Friday—so skittish about disclosing the businesses that received $660 billion in taxpayers money from the Paycheck Protection Program? Some clues: there was, of course, the outrage that followed when it was revealed the likes of Shake Shack, Ruth's Chris Steak House and the Los Angeles Lakers had sucked-up PPP money intended for your local dry cleaner and tattoo parlor. Now, as Politico reported, well-off members of Congress got loans, too. So there was plenty more greed heads to hide from taxpayers—and maybe very connected ones. So, there, the Mnuchin mystery solved. You're welcome...Newsweek Contributor Plug: Our friend, consultant and Lower Eastside Girls Club of NY board member Susan McPherson will be part of the group's virtual event on June 25. Tickets here...On The Street Jukebox: What's more timely than the late Gil Scott-Heron's "The Revolution Will Not Be Televised"? It is actually being televised, but Gil didn't know that back in 1971. Listen here...Finally: can't wait to see what Geoffrey Berman is going to get for his book...See you next week.