A Laborforce Exodus, Stimulus Uncertainty Weighs on the Markets, and Markets During Election Seasons
October 23, 2020 | FIRESIDE CHARTS
The manufacturing recovery may have slowed in September, but we’re still seeing some good numbers from the Kansas City Fed and other regional indices. Covid-induced changes to the workforce remain a major concern as laborforce outflows, hour reductions, and stimulus uncertainty weigh on consumer confidence, which has ticked down amid an apparent third wave of infection. The markets are also feeling the effect of prolonged stimulus negotiations, as well as growing political uncertainty as the election approaches. How have markets historically reacted during election season?
1. Another strong Regional Fed manufacturing survey:
Source: The Daily Shot, from 10/23/20
2. There is a direct tie between Covid outbreaks and hours worked:
Source: The Daily Shot, from 10/23/20
3. A lot of workers, presumably many Boomers, simply have not looked for another job—similar to what happened after the Great Recession…
Source: Labor Department Via the St. Louis Fed, from 10/23/20
4. The second Covid wave is also showing up in consumer confidence:
Source: The Daily Shot, from 10/23/20
5. As government support ends, what will happen to consumer spending, especially for the millions still unemployed?
Source: The Daily Shot, from 10/23/20
6. Four days does not make a trend, but the politicization of the stimulus package has put a weight on the markets. Days are ending with a downdraft rather than a rally…
Source: The Daily Shot, from 10/22/20
7. Keeping corporate cash on hand is still warranted…
Source: Goldman Sachs Global Investment Research, from 10/23/20
8. Are small caps finally closing the performance gap? Here is a long-term view of relative performance.
Source: The Daily Shot, from 10/23/20
9. Many advisors have been asking about this election versus others. Here is an historical compilation of market volatility during the election process…
Source: Advisor Channel, from 10/22/20
10. Here is another view (VIX) of election-based market volatility. Historically, we are in the worst of it right about now…
Source: Advisor Channel, from 10/22/20
11. Europe is getting crushed by their second wave and it also is showing up in consumer confidence:
Source: The Daily Shot, from 10/23/20
12. Despite low Covid numbers, the world’s third largest economy has yet to see a manufacturing recovery…
Source: The Daily Shot, from 10/23/20
13. Global new Covid cases are now approaching 500,000/day:
Source: JHU CSSE, as of 10/23/20
14. …And the U.S. is in a clear third wave. This is one higher high we need to avoid…
Source: JHU CSSE, as of 10/23/20
15. Nearly 1/3rd of Americans who voted in 2016 have already voted this year. For the sub-set of mail-ins, there is plenty of time for the USPS to deliver…
Source: The Daily Shot, from 10/22/20
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.