Fading Stimulus, A Looming Housing Crisis, and What Do the Manufacturing Sector and 2016 Have to Say About Yields?
November 4, 2020 | FIRESIDE CHARTS
Like the election, the path forward on additional stimulus funding remains TBD. Though the initial $1,200 direct payment helped many pay off debt and gave a temporary boost to disposable income and savings, the glow is fading. The housing market is also feeling the effects of the pandemic era with surging demand, climbing home prices, and a looming rent crisis that has millions facing eviction. And could signals from the manufacturing sector and a look back at 2016 indicate that higher yields may finally be on the horizon? The FOMC kicked off their first post-election day meeting today, but they’ve already made their stance on rates clear…
1. With the election still yet to be wrapped up, we’ll focus on what the winners will face as the pandemic is still with us…
Source: The Daily Shot, From 11/4/20
2. While circumstances are very different, the Covid-induced flight to the ‘burbs is skewing the housing market again…
Source: BCA Research, From 11/3/20
3. Yet the looming crisis does not center on homeowners, but rather the tens of millions of Americans that are about to become homeless. Washington needs to take care of these people now or we will have an even larger economic catastrophe, on top of the misery, next year…
Source: Census Bureau, Moody Analytics, From 11/3/20
4. Would you have guessed that renewable energy employs 3x what “traditional” energy employs?
Source: The Daily Shot, From 11/4/20
5. Inflation hawks are touting the robust manufacturing numbers, government deficit spending and bond supply and QE as the reasons for inflation. Are they forgetting the Fed’s own stance of low rates through 2023, backed by unlimited QE potential and the fact that over 25 million Americans remain unemployed?
Source: The Daily Shot, From 11/3/20
6. Will yields have a similar reaction to the last Presidential election?
Source: Bloomberg/ Morgan Stanley, From 11/4/20
7. A great chart showing why passive indexing is not always a magic elixir…
Source: Bloomberg, From 11/4/20
8. Beijing halted the Ant Group IPO, with regulators now planning to discourage banks from working with the firm. There seems to be some concern about Ant’s size posing risks for financial system.
Source: The Daily Shot, From 11/4/20
9. Manufacturing has also been robust in Europe…
Source: IHS Markit, From 11/3/20
10. Yet Covid’s rampant spread threatens to undo it all over again…
Source: The Daily Shot, From 11/3/20
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.