Jobs are still coming back, but at a slower pace. Approximately half of the jobs lost since the onset of the pandemic have been recovered, and—while not exactly forming a full V (we see more of a checkmark)—are returning at a significantly faster pace than in past periods of significant losses. State and local governments have seen massive losses to tax revenue in 2020 in a development that could spell trouble for muni-bond investors. And while 10-year UST yields may look strong from a certain angle, the trend likely isn’t sustainable. Do you have an alternative in place?
1. Is the jobs recovery stalling?
![nonfram payrolls](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-Is-the-jobs-recovery-stalling.png)
Source: The Daily Shot, from 10/5/20
2. It’s certainly not a “v” shape…
![nonfarm payrolls](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-The-jobs-recovery-is-certainly-not-a.png)
Source: The Daily Shot, from 10/5/20
3. Yet if we extend the scale to compare to past recoveries, we get a “V”… but also see we have a long way to go…
![labour markets](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-Yet-if-we-extend-the-scale.png)
Source: Economic and Strategy Group, National Bank of Canada, from 10/5/20
4. SMID had a good week but have a lot of work to do to catch the big boys…
![SMID](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-SMID-had-a-good-week.png)
Source: The Chart Store, from 10/5/20
5. Is China finally buying U.S. food stock?
![Soybean futures](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-Is-China-finally-buying-U.S.-food-stock.png)
Source: The Daily Shot, from 10/5/20
6. Here is the issue! This trend cannot continue going forward as the rates have been “all” wrung out… Time to adjust?
![Bond Boom for investors](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-Here-is-the-issue.png)
Source: The Daily Shot, from 10/5/20
7. Will the muni bond space see more defaults or just credit downgrades?
![historic tax revenue](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-Will-the-muni-bond-space.png)
Source: The Daily Shot, from 10/5/20
8. The pandemic has hit South America particularly hard and it is showing in their stock market returns…
![South America pandemic](https://blog.investbcm.com/wp-content/uploads/2020/10/10.5-The-Pandemic-has-hit-South-America.png)
Source: The Daily Shot, from 10/5/20