The Jobs Recovery is Losing Traction, A Look at Housing, and Multiple Emergency Lending Facilities Set to Close

The jobs recovery is slowing and is poised to struggle further this winter if the current explosion in new Covid cases continues at the same pace. More than 10 million jobs have been lost since the onset of the pandemic, and the typical duration of unemployment is climbing. Though many used stimulus payments and curbed spending to pay off debt, negotiations on additional funding stalled in Congress this summer, and now many—particularly renters—are faced with being unable to afford their homes, even as the housing market itself enjoys significant growth. The market rotation has continued this week as investors pile into small caps, Energy, and other sectors that have struggled under Covid. Under pressure from the Treasury Department, many of the Fed’s emergency lending programs are being shuttered—though the decision is not without controversy. Will the stability these programs provided in the early days of the pandemic last if Congress “reappropriates” their funding?

1. The recovery in employment is increasing at a decreasing rate. Will the new Covid surge turn this metric back in negative territory?

Source: JP Morgan, from 11/20/20

2. For many businesses such as travel, hospitality and leisure, there has been little jobs recovery. These are the folks struggling to pay rent/mortgages…

Source: The Bureau of Labor Statistics, from 11/20/20

3. Job recovery has allowed almost 70% of existing homeowners who were delinquent to catch-up and become current.

Source: The Federal Reserve Bank of New York, from 11/19/20

4. Yet those that rent their homes show a different story…

Source: U.S. Census Bureau, as of 10/26/20

5. The Covid-induced “flight to the ‘burbs” is spurring robust growth in the new housing market. How long and strong will this trend continue?

Source: The Daily Shot, as of 10/31/20

6. Wonderful vaccine news has spurred a rally in just about every asset class and sector that has lagged for years. One week does not make a trend, and we wonder if this might be a temporary bargain-hunting rally or something more permanent…

Source: The Daily Shot, as of 11/9/20

7. The Fed, now that it has created stability in the lending markets, is shutting down some of the more unusual and lesser-used lending facilities…

Source: U.S. Federal Reserve, as of 11/11/20

8. How can an “asset class,” designed for criminal enterprise, with built in periodic doubling of supply, rife with exchanges getting little told millions of coins stolen with no recourse, subject to massive swings in price, be anything more than a gambit?

Source: Bloomberg, from 11/20/20

9. The Covid reality is that Americans will have a choice: wear masks or face forced closures. Current new caseloads are 4 times higher than during the previous lockdowns, and Thanksgiving get togethers will not help…

Source: The Daily Shot, from 11/19/20