Payrolls Slump, Equities Hit New Highs, and a Quick Consult with ‘Dr. Copper’
January 11, 2021 | FIRESIDE CHARTS
Nonfarm payrolls reversed course in December, posting losses for the first time since May. The report did, however, include upward revisions for October and November, and the December losses were largely contained in an unsurprising industry—most others saw gains. Inflation remains a concern as both global food prices and shipping costs climb. Equities meanwhile remained undeterred by last week’s unrest and managed to clock some new all-time highs to close out the week. And that performance is showing up in their prices… do you know how many hours of work it would take to buy the S&P 500® Index? Commodities meanwhile appear to be priced moderately in comparison, and is “Dr. Copper” sending signals about the recovery?
1. The employment recovery looks to have ended for now:
Source: The Daily Shot, from 1/11/21
2. But unemployment is concentrated in public-facing segments of the economy:
Source: The Daily Shot, from 1/11/21
3. The Covid-induced recession and recovery happened so fast it is hard to see in the last right-hand grey area. The current ~2% gap is likely the remaining sectors that cannot open without herd immunity…
Source: The Chart Store, from 1/11/21
4. One inflationary cost input that cannot be ignored:
Source: FOA food price index, as of 12/2020
5. Another cause of imported inflation?
Source: The Daily Shot, from 1/11/21
6. Last week every major U.S. composite except utilities set new, all-time highs:
Source: The Chart Store, from 1/11/21
7. Small Caps are trying to make up for years of underperformance in a few weeks…
Source: The Chart Store, from 1/11/21
8. By some measures, stocks look expensive…
Source: The Chart Store, from 1/11/21
9…And commodities look cheap:
Source: The Chart Store, from 1/11/21
10. “Dr. Copper,” along with many other commodities, have broken out to the upside…
Source: The Chart Store, from 1/11/21
11. U.S. corporations have taken advantage of the low interest rates. Will the buyers now be stuck with the low-coupon bonds in a rising rate environment?
Source: The Daily Shot, from 1/11/21
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.