A Disappointing Jobs Report, Speculation Surges, and Dr. Copper Prescribes Optimism. Is it Justified?
December 7, 2020 | FIRESIDE CHARTS
The U.S. added 245,000 jobs in November—less than half of October’s 630,000+ gains—in a disappointing payroll report Friday. Is the U.S.—and the battered services sector in particular—poised for further struggle heading into winter as virus cases soar and new restrictions roll in? Equity investors remain undeterred though, as many indices closed out last week by hitting fresh highs and speculative activity continues to surge, fueled largely by retail investors. Aided by the dollar’s decline, commodities have continued to climb—“Dr. Copper” just broke out above a 9-year trend line—and virus concerns have yet to spark a renewed demand for gold. Western nations are set to start administering the first doses of the Covid-19 vaccine this week, but could the resultant market optimism be getting a little ahead of itself?
1. The U.S. job recovery is increasing at a decreasing rate. Until the vaccines inoculate ~2/3rds of humanity, certain sector/industries are just not going to recover.
Source: Oxford Economics/ Haver Analytics, from 12/7/20
2. Remember the trade war? Since the U.S. has ~5 million more cases than any other country, our service sector is still getting crushed…
Source: The Daily Shot, from 12/7/20
3. As seasonal tug-of war: while the S&P 500® Index was able to reach a new high Friday, all eleven sectors were not. Covid meets year-end mania?
Source: The Chart Store, from 12/7/20
4. Speculators are driving call options to extremes. Parabola up, parabola down?
Source: The Daily Shot, from 12/7/20
5. The new, stay-at-home investor is feeling greed today, but that other emotion is even more powerful…
Source: The Daily Shot, from 12/7/20
6. A microcosm of euphoria? Is Tesla really worth more than GM, Daimler, Volkswagen and Toyota… combined?
Source: The Daily Shot, from 12/7/20
7. The USD looks set to test the 2017 lows…
Source: The Chart Store, from 12/7/20
8. The dollar’s decline is helping commodities’ make a run…
9. Copper is on a tear, breaking out of a 9+ year slump…
Source: The Chart Store, from 12/7/20
10. Curiously, gold is bucking the trend as the vaccine news overwhelms the safe-haven play…
Source: The Chart Store, from 12/7/20
11. While the U.S. service economy is under Covid’s lid, China’s manufacturing is dominating world trade…
Source: The Daily Shot, from 12/7/20
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.