~$57 Billion in Back Rent, the “Mother of All Bubbles”, and Checking In On the SPAC Boom
February 10, 2021 | FIRESIDE CHARTS
The Oxford Economics U.S. Recovery Tracker shows some marginal improvement in the past few weeks as vaccination has launched in earnest, though unemployment remains elevated and a significant concern. And with another $1.9 trillion in stimulus on the table and the budget deficit set to hit a new post-WWII record, we’re wondering if the next round of stimulus could be more targeted—especially as many are directing the funds toward savings while U.S. renters rack up ~$57 billion in back rent. Meanwhile, trading volume has soared this year thanks largely to the GameStop-inspired influx of new retail investors; are those investors also helping drive “the mother of all bubbles”? Global earnings revisions meanwhile have hit a record high—though context remains key—and the SPAC boom is showing no signs of slowing as deals are on pace for their strongest quarter ever. Is the momentum sustainable?
1. So far, the second wave has had a much smaller impact on our economy. Just don’t ask the 10 million+ without a job…
Source: Oxford Economics, from 2/9/21
2. Should the next stimulus package be tied to only those who have lost their jobs? Otherwise, most of the stimulus is only stimulating savings…
Source: The Daily Shot, from 2/9/21
3. Is this where the stimulus/rescue package should focus? $57 billion of back rent will affect landlords and banks…it is all a connected chain…
Source: The Daily Shot, from 2/10/21
4. Covid-induced flight to the ‘burbs:
Source: The Daily Shot, from 2/9/21
5. Retail trading has exploded. Certainly the brokerage houses are delighted. I wonder how many new investors even know what a spread is?
Source: Bloomberg, from 2/9/21
6. Are you wearing earplugs? This pop could be loud!
Source: The Daily Shot, from 2/10/21
7. Great news, but coming out of a pandemic and the exaggerated earnings downgrades makes these upwards revisions much easier…
Source: The Daily Shot, from 2/10/21
8. There is so much capital looking for a home that many investors are giving it to SPACs and just saying “do something with it.” Some may end well, others, not so well. Regulators are taking note…
Source: The Daily Shot, from 2/10/21
9…yet one cannot deny performance so far. The future?
Source: The Daily Shot, from 2/10/21
10. Central bank liquidity is not just limited to the U.S.:
Source: The Daily Shot, from 2/9/21
11. The world is awash in liquidity…
Source: The Daily Shot, from 2/9/21
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.