Services Spending Continues to Lag, Inside the Retail Investing Upheaval, and a Look at Bond Market ‘Normalization’
February 1, 2021 | FIRESIDE CHARTS
Consumer spending held up well in December, dipping slightly month-over-month but still coming in above expectations. Spending on services however, is still lagging and has yet to recover to pre-pandemic levels. Will true revitalization remain out of reach until vaccination hits a critical mass? The GameStop saga and subsequent market upheaval meanwhile has expanded to include silver, which has spiked enough to generate a short squeeze in silver ETFs. With trading volumes in unprecedented territory, it’s certainly drawn the attention of regulators hoping to calm the waters and protect novice investors from potentially disastrous fallout. Earnings beats are setting a positive tone this earnings season, but corporate insiders seem to be voting with their feet and may have something to say on the matter. And as the spread to high yield shrinks, we’re wondering if investors are being appropriately compensated for the risks they’re taking…
1. While durable goods spending has made up the gap and is now moderating….
Source: The Daily Shot, from 2/1/21
2…spending on services has yet to come close to pre-Covid levels:
Source: The Daily Shot, from 2/1/21
3. The online crowd is now moving on to new “targets”…
Source: The Daily Shot, from 2/1/21
4. The new “retail investor crowd” is certainly making waves, but are they swimming in dangerous waters? One of the ringleaders works out of his basement here in Massachusetts. Is he giving illegal investment advice to thousands with no suitability checks?
Source: The Daily Shot, from 2/1/21
5. Earnings beats have been having a spectacular quarter. Is it enough to keep up with market expectations and sustainable P/E levels?
Source: Bloomberg, from 2/1/21
6. May we presume that senior managements and their boards know when it is a good time to buy and sell their own stocks?
Source: The Daily Shot, from 2/1/21
7. The bond market has seen some quiet “normalization”. The shape of the curve and the yields for the 3-30 year terms have been steepening…
Source: The Chart Store, from 2/1/21
8. Is the yield spread between the 10-year UST and junk bonds too low? ~3% to reward ten years of junk bond risk?
Source: The Chart Store, from 2/1/21
9. Is China’s manufacturing PMI already showing the resurgence of Covid in China? Most of the rest of Asian markets are showing relief that Chinese manufacturing dominance has not accelerated…
Source: The Daily Shot, from 2/1/21
10. When can we expect herd immunity?
Source: The Daily Shot, from 2/1/21
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.