A Dour Jobs Report, the Service Sector Recovery, and a Commodities Check In
May 7, 2021 | FIRESIDE CHARTS
Though employment growth fell short of estimates, good news remains: Jobless claims fell below 500,000 for the first time since the onset of the pandemic last week and last month layoffs fell to their lowest level in over two decades. See more in today’s jobs report. Service sector growth is also accelerating, but not without a rise in input prices and associated inflationary pressures. And as household stock allocations soar, investors may want to keep an eye on the manufacturing sector. As the Chinese market continues to lag its peers, we’re eyeing the brewing anti-trust investigations in the U.S. and wondering if they could have a similar effect at home. Even if so, a P/E ratio comparison shows that plenty of opportunities remain across the globe… Inflation fears meanwhile are climbing as yields dip and commodities—save gold—surge, pushing “Dr. Copper” to a 20-year+ high. Will the weaker-than-expected jobs report and sinking USD be enough to push gold to join its peers?
1. Jobs are returning to the sectors most decimated by Covid. The manufacturing and construction sectors are hotter than hot which may put pressures on inflation:
Source: The Daily Shot, from 5/7/21
2. Growth in the U.S. service sector is the highest in years:
Source: The Daily Shot, from 5/6/21
3. We note the costs of goods sold is also at multi-year highs. Will these costs get passed on to consumers?
Source: The Daily Shot, from 5/6/21
4. This is the most basic and important inflation measure, especially for those with limited means:
Source: The Daily Shot, from 5/7/21
5. One reason we like to focus on manufacturing PMIs:
Source: The Daily Shot, from 5/7/21
6. How will U.S. investors react to the next bear market?
Source: The Daily Shot, from 5/7/21
7. The Chinese Government crackdown on their tech giants has had a sobering effect on their markets. Will anti-trust efforts on the U.S. tech giants at home and abroad have a similar effect?
Source: The Daily Shot, from 5/6/21
8. As the U.S. equity surge continues, a lot of relative value opportunities are being created elsewhere. The U.S. economy is not the only one that is surging!
Source: The Daily Shot, from 5/6/21
9. TIPS are on the move again, stoked by inflation fears:
Source: The Daily Shot, from 5/6/21
10. “Dr. Copper” is at its highest level in two decades:
Source: The Daily Shot, from 5/7/21
11. As the USD and U.S. yields back off a bit, will gold, the only major commodity that has not participated in the commodity surge, make a run?
Source: The Daily Shot, from 5/7/21
12. Production cost increases are surging across the globe. Here is Europe:
Source: The Daily Shot, from 5/6/21
13. Global debt supply has doubled in 15 years. (This chart does not include 2021 debt issuance.) How much more can the market absorb before rates rise?
Source: The Daily Shot, from 5/7/21
14. Happy Friday!
Source: The Daily Shot, from 5/6/21
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.