Employment remains a persistent problem in the U.S., forming a—to bring back a 2020 buzzword—checkmark recovery as continuing unemployment claims remain stubbornly elevated. As 21 states move to end pandemic-era boosts to unemployment assistance, could the labor shortage begin to ease and activity reignite in bottlenecked industries? Meanwhile, are investors, and their $1.3 trillion of annualized equity inflows so far this year, prepared for a potential uptick in volatility as we move further out from the 2020 bear market? The S&P 500® Index is already experiencing one of its longest stretches without a 5% pullback in a decade, after all… And as cryptos fall under pressure amid increased regulation in China and #buythedip trends on Twitter, the 1000% spike in reported losses to crypto scams over the last year has us concerned. Do novice investors and the reddit crowd know what they’re getting into?
1. Despite a roaring economy, there are still sectors that have a long way to go to full recovery. U.S. employment is only back to the trough of the Great Recession:
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-Despite-a-roaring-economy.png)
Source: Blackrock, from 5/19/21
2. Despite massive job openings and an acute lower-end labor shortage, continuing unemployment claims remain stubbornly high. If the government paid you more not to work, would you go back to work?
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-Despite-massive-job-openings.png)
Source: Wall Street Journal, from 5/18/21
3. The massive increases in building costs plus supply bottlenecks and labor shortages have put many new housing projects on hold:
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-The-massive-increases.png)
Source: Axios, from 5/19/21
4. It seems everyone is “all in” on equities. Who will be the next buyer?
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-It-seems-everyone.png)
Source: BofA Global Investment Strategy, from 5/19/21
5. With history as our guide, this year may have some volatility. Note the larger increases hare followed by the larger corrections:
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-With-history-as-our-guide.png)
Source: Truist Advisory Services, Bloomberg, from 5/18/21
6…And we are overdue for a correction as we haven’t seen even a 5% pullback in the S&P 500 since last fall:
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-...And-we-are-overdue.png)
Source: Truist Advisory Services, from 5/18/21
7. Another “OK Boomer” reflection on crypto: NO protection or FDIC type insurance:
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-Another-OK-Boomer.png)
Source: Axios Visuals, from 5/18/21
8. More than half of the U.S. Treasury bond issuance is being purchased by the Fed. What happens when the Fed tapers/ends QE?
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-More-than-half.png)
Source: The Daily Shot, from 5/18/21
9…Not to mention almost $2 trillion in mortgage-backed bonds…
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-...Not-to-mention.png)
Source: Bloomberg, from 5/18/21
10. Double/triple bottom? Which way will the USD break?
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-Double-triple-bottom.png)
Source: Bloomberg, from 5/19/21
11. Japan appears to be getting control over their 4th wave of Covid, great news for Olympic athletes. Their GDP, however, did not respond well:
![](https://blog.investbcm.com/wp-content/uploads/2021/05/5.19-apan-appears-to-be-getting.png)
Source: The Daily Shot, from 5/18/21