Nearly two million more Americans found themselves out of a job and applying for unemployment last week in the coronavirus-era trend that just won't quit (no pun intended). Continuing claims, however, fell in what could be an indication that firms are rehiring as states begin to reopen, but we'll have to wait and see. Manufacturing recovery looks to be gaining some momentum in a trend we hope will continue, and some other emerging trends may soon affect the price of our favorite morning beverages—see today's final chart for more on our favorite evening beverage. And as the first of the month approaches, housing costs continue to weigh heavily on a population struggling with an unprecedented economic slowdown. How will failure to meet rent and mortgage payments affect the banks? And will the banks (and junk bond holders) be able to ride out the largest wave of bankruptcy filings since the Great Recession? Let's hope some of that global stimulus will help cushion the blow...
1. Almost 2 million more Americans filed for unemployment last week. While the initial surge is slowing, it is decreasing at a slower rate and the levels are far higher than the Great Recession.
Source: WSJ Daily Shot, from 5/29/20
2. Continuing claims showed improvement, but we don't yet know if it is due to re-hiring, people dropping out of the work force, or some of both...
Source: WSJ Daily Shot, from 5/29/20
3. More good news out of the Richmond Fed. Will the recovery continue at the same speed or will it slow down?
Source: WSJ Daily Shot, from 5/28/20
4. Good news for dairy farmers, but they had to dump a lot of milk to get the price recovery...
Source: WSJ Daily Shot, from 5/28/20
5. Looking good, Billy Ray! Feeling good, Louis! Hey, what ever happened to Beaks?
Source: WSJ Daily Shot, from 5/28/20
6. Has your favorite coffee shop lowered prices?
Source: WSJ Daily Shot, from 5/29/20
7. Great news for the environment!
Source: WSJ Daily Shot, from 5/29/20
8. Do we have a burgeoning systemic risk to the banks?
Source: WSJ Daily Shot, from 5/28/20
9. Liquidity is not the issue...it is safety!
Source: WSJ Daily Shot, from 5/28/20
10. When fewer than a dozen companies make up ~27% of the S&P 500 Index, it makes us wonder about risk...
Source: WSJ Daily Shot, from 5/29/20
11. And risk can come from new sources...
Source: WSJ Daily Shot, from 5/29/20
12. Technically, treasuries may be overbought. But when your buyer is the Fed and they have an unlimited QE budget, then technicals go out the window...
Source: WSJ Daily Shot, from 5/28/20
13. Junk bonds and bankers beware! Many weak companies, especially in retail, are filing for bankruptcy including J.C. Penney, J.Crew, Stage Stores, Neiman Marcus, Hertz, Tuesday Morning, Le Pain Quotidien, and many others...
Source: WSJ Daily Shot, from 5/29/20
14. Global stimulus continues!
Source: WSJ Daily Shot, from 5/28/20
15. The world's third largest economy so far is holding up better than most...
Source: WSJ Daily Shot, from 5/29/20
16. Masks and social distancing matter! To quote Big Pappi: "Stay Strong!"
Source: WSJ Daily Shot, from 5/29/20
17. Now for the important stuff...
Source: WSJ Daily Shot, from 5/29/20
Many financial plans were built to support a 4-5% withdrawal need for clients. But how can you meet that withdrawal need when the 10-year U.S. Treasury yield at 0.65% and trillions of dollars of bonds have negative yields? Click below to read Portfolio Manager Dave Haviland's perspective on using Total Return to meet withdrawal needs in today's historically low interest rate environment.
Disclosure: The charts and info-graphics 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 a recommendation to take any action. Individual securities mentioned may be held in client accounts.
