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A Bird's Eye View Blog

Fireside Charts: Breaking Down the Jobs Report, Surging Defaults, and Manufactured Market Gains in China

By:BCM Investment Team | Date:Jul06, 2020 | Category: Equity, Economics, Market Highlights, Fireside Charts

June's jobs report brought some pleasant surprises, showing another solid month of job growth as economies came back to life and employers welcomed back laid off or furloughed workers, but there's still "a lot of hardship in these numbers" says White House economic adviser Larry Kudlow—especially for certain vulnerable sectors. Fourth of July celebrations were different for a number of reasons this year, but the 28.6% employment drop for the leisure and hospitality sector certainly played a role. So far, employment recovery looks to be forming the start of a V-out, but a look at past post-recession job gains—particularly following the '07-'09 crisis—shows that we could still have a long road ahead. Meanwhile, corporate defaults are continuing to surge as retail and energy companies are being driven to bankruptcy at record rates. Large cap market leaders in tech and communications continue to fare better than most, and have dragged their respective indices higher through the market recovery. China took another approach, as influential state media seemed to speak a bull market into existence... but is it sustainable? Here in the U.S., we're hoping surging (re: record-high) COVID-19 cases and interrupted state reopenings won't cut our recovery off at the knees...


1. While the June jobs reports surprised to the upside, certain industries are still reeling...

Source: WSJ Daily Shot, from 7/6/20



2. Here is a historical look at job recovery after a recession:


Source: WSJ Daily Shot, from 7/6/20



3. While the annualized pace for 2020 bankruptcies is expected to exceed 2009, two industries are taking the brunt of it all:


Source: WSJ Daily Shot, from 7/6/20



4. At mid-year, U.S. large-cap, predominantly Tech, Communications, Consumer Discretionary and Healthcare, have provided the market leadership....


At mid-year, U.S. large-cap predominantly

Source: The Chart Store, from 7/5/20



5. With a lot of Chinese government "encouragement", Beijing has jawboned a "mini-bull", driving their markets up ~5% overnight and ~10% in a week...


Source: WSJ Daily Shot, from 7/6/20



6. California has now exceeded NY's worst day...


Source: JHU CSSE, as of 7/6/20



7. The same goes for Florida...


Source: JHU CSSE, as of 7/6/20



8. As plans remain uncertain for the fall, a majority of students feel "distance learning" should come with a significant discount.


6.30 reserve discount online tuition

Source: Statista, from 6/29/20





The world has changed a lot since Q1. For a little perspective ahead of the release of our  Q2 commentary, read "BCM 1Q20 Market Commentary: To V or Not to V, That Is the Question…" and stay tuned for our Q2 commentary coming later this week!


BCM's 1Q20  Market Commentary


Disclosure: The charts and info-graphics 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 a recommendation to take any action. Individual securities mentioned may be held in client accounts.