There’s a Bull Case on Stocks Tied to Rising Jobless Ranks

You’ve never had to look far during the Covid crisis to find displays of cold-blooded logic among stock investors. The latest centers on the potential benefits to corporate earnings in rising unemployment.

It’s a view getting a wider airing -- that job cuts are setting the stage for a swift rebound in profits if the economy reaches a full-blown recovery. That’s a big “if,” of course, as any improvement in profitability would have to offset the demand destroyed by lost jobs. But conceivably, a leaner cost structure will allow companies to pocket more earnings from sales once growth revives.