Breaking Down the Jobs Report, Bond Yields Dwindle Further, and America Goes Back to School
August 10, 2020 | FIRESIDE CHARTS
Congress reached an impasse on the next round of stimulus funding last week—particularly the boost to unemployment benefits—just ahead of Friday’s jobs report. And while the U.S. added ~1.8 million jobs in July—approximately 1.5 non-farm jobs—inter-agency differences in figures, a mass exodus from the work force, and a growing typical duration of persistent claims remain causes for concern. Big tech continues to dominate in an earnings season characterized by earnings beats, but historically low treasury and junk bond yields are hurting fixed income investors… and the USD. And as the U.S. passes the five million Covid-19 cases mark, the majority of colleges are moving ahead with in-person classes—could this back to school season be the start of more trouble for public health and the economy?
1. While the U.S. economy created just under 1.5 million jobs last month, we are still only about 1/3 “recovered.”
Source: WSJ Daily Shot, from 8/10/20
2. Yet official unemployment claims show almost twice the number remaining unemployed. Who is correct?
Source: WSJ Daily Shot, from 8/10/20
3. For a variety of reasons, many have simply opted out of the workforce…
Source: WSJ Daily Shot, from 8/10/20
4. It looks like the analysts and companies alike were collectively, and understandably, too pessimistic…
Source: WSJ Daily Shot, from 8/10/20
5. 2020 YTD results continue to be dominated by large U.S. Tech—or rather, the indices that hold the most large U.S. tech companies…
Source: The Chart Store, from 8/9/20
6. The 10 year UST and U.S. mortgage rates both hit new all-time lows last week.
Source: The Chart Store, from 8/9/20
7. Yield-starved investors have driven junk bond yields back to the 2017-2018 historic lows. Has anything happened to the U.S. economy that might question this logic?
Source: The Chart Store, from 8/9/20
8. Now that U.S. rates are almost as low as the rest of the industrialized world, support for the USD is waning….
Source: The Chart Store, from 8/9/20
9. These numbers are likely going to change a lot in the next month or so…
Source: Statista, as of 7/26/20
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.