Investors were given a reminder this week on just where the consumer is. Retail sales dropped 1.1% last month, with receipts declining almost across the board. Data for October was revised down to show sales slipping 0.1% instead of rising 0.3%…
The November jobs report was far worse than expected. The U.S. economy added only 245,000 jobs in November — well below the 500,000 that many economists hoped…
Despite the market closing slightly lower this week – the market remains optimistic. For eg, a number of economic headwinds hit the tape. However, the market remains incredibly resilient – focusing on the potential upside for next year.
The world’s largest central bank concluded its two-day meeting yesterday and held interest rates steady. But it wasn’t interest rates the market was interested in…. it knows they are staying at zero for at least another 12 months (and likely longer).
The “great divergence” continues… as stocks inched closer to their all-time highs… only ~2% away. Meanwhile… the real economy heads in the opposite direction. Today we learned ~1.2M more US people submitted initial unemployment claims. That makes it 20 straight weeks where these initial weekly claims have exceeded 1.0M.
Hands up if you think we will have V-shape recovery?
I don’t.
Never have.
I struggle to see how we have anything remotely like a “V” in absence of an effective (and widely distributed) proven vaccine.
Over 4M jobs were said to be added in June. Great news. However the net decline for 4 months is almost 15M. The problem is – I fear many of those jobs are permanently gone…
It’s troubling to learn that ~30M+ Americans have lost their jobs in just six weeks. But what if that number were to spiral to exceed 40M over the subsequent two months? My thinking is if at least 30% of these jobs don’t come back within 2 months – we could be looking at very slow and painful recession…
There’s something wrong with this equation…
Over the past six weeks – more than 30M Americans have lost their jobs. Furthermore GDP for Q1 shrunk by almost 5% and is expected to contract between 30% and 40% for Q2.
And despite the worst economic numbers (and forecasts) we’ve seen in nearly a century – the stock market just posted its best monthly gain since 1987.
Think about how much the macro landscape has changed in a year. For eg, this time last year it was a market growing at a steady 2.0%+ GDP with near full employment and wage growth of over 3%. And today? Well stocks are at the same level – but we have corporate profits (and revenue) decimated; government regulations (not COVID) have forced 26.5M people to file for unemployment (with millions more to follow)…
