Economic Commentary: Vaccine Reactions
No, we are not talking about shortness of breath and swelling. We are talking about how the markets might react to the news that a vaccine (or a few) are available. We have already seen how medical announcements have set off positive reactions. Now that we are further along in the process and we may be weeks away from such an important announcement, we wonder how wild the markets might get.
Keep in mind that even an approval of a vaccine may not mean that one is available for the general public for some time afterwards. Markets don't move on happenings -- they move ...
Economic Commentary: The Coming Foreclosures
Just recently, have been released showing the lowest foreclosure rate in history for the first half of this year according to ATTOM Data Solutions. How can that be true during a deep recession? These low foreclosure rates are actually a function of two different factors. For one, the rate of foreclosures was low before the COVID-induced recession hit. Secondly, the government quickly implemented a moratorium on foreclosures as soon as the economy was shut down.
Eventually we will have to "pay the piper" for this combination of a deep recession and a ...
Economic Commentary: July
Last week when the first measure of economic growth came out for the second quarter, we acknowledged that this was a picture of how bad things became during the depths of the shutdown. At the end of the last week we witnessed a reading which gives us information regarding how long these time will last. We are talking about the July employment data. And to understand the context of this number we have to go back to the depths of the first part of the year.
In March, as the economy was shutting down, we lost 1.37 million jobs. In April we lost an astounding ...
Economic Commentary: The Jobs Picture
We knew it was going to be ugly and it was. Along with other negative records our economy is sure to break, the unemployment rate rose to 14.7% last month, as the economy lost 20.5 million jobs. Just to put this in perspective, the number of jobs lost wipes out the jobs added for the past seven years. All in one month. This is the state of our "light switch" recession, which means the economy was turned off like a light switch. Our rate of unemployment is now the highest since the Great Depression.
While the numbers were as expected, they are no less painful, and they ...
Economic Commentary: Oil
It was almost 50 years ago that the rising price of oil was one of the factors which helped plunge us into a deep recession. And while not the most important factor, subsequent recessions have followed previous peaks in oil prices. It seems that today’s recession has just about turned all of our assumptions around. Of course, we have never had a recession in which the economy was turned off like a light switch.
The switch did not give enough time for oil production to react and we find ourselves awash in oil decades after a recession was caused by shortages. While ...
Economic Commentary: Trade
With the fronts on the trade war expanding from China to India and closer to home on our Southern Border with Mexico, the markets have become very nervous as to how increased tariffs will affect the economy, and we have seen stocks become more volatile. Obviously, the Federal Reserve Board is watching the markets as well, as they are concerned that the expansion will continue. Thus, we saw an interesting statement from Fed Chairman Powell recently:
"We are closely monitoring developments on trade. As always, we will act as appropriate to sustain the expansion," Powell ...
Economic Commentary: Jobs
Will May Jobs Bring Summer Doldrums
Despite trade wars, political battles and all the other noise swirling around, the one area in which the economy has continued to shine has been the creation of jobs. It is hard to even think of a recession when you are creating approximately 200,000 jobs per month. When jobs are created, consumers spend more and there is little chance of an economic downturn in this scenario.
This is why each month; the analysts focus on the numbers above all else. And with the recent revision of the measure of economic growth for the ...
Economic Commentary: Trade War
Trade Wars Meet The Jobs Report
Stocks have been on a general downward trajectory since the trade war with China heated up. This has happened despite the fact that the economy seems to be on solid footing, especially within the area of jobs growth. The initial reading of economic growth for the first quarter of the year was very strong. When the first revision was released last week, the results remained as a positive indicator.
This Friday's job report represents our first data from May. And it may very well be the most important single data point we will see ...
Economic Commentary: Data
Fresh Economic Data on the Way
The most recent economic data has indicated that the economy was indeed stronger than we expected. The stock market was recovering nicely from losses incurred late last year, despite speed bumps in the road as the trade war with China heated up once again after talks stalled. Jobs data, though volatile, still has showed that we were adding enough jobs each month to keep the unemployment rate historically low. And the measure of economic growth for the first quarter exceeded expectations.
Now we will see a fresh batch of economic data which ...
Economic Commentary: Tariff
That Word Tariff Has Been Spoken
So, we had declared that everything was in place for a fantastic economic ride. Low interest rates, a moderately expanding economy and rising stock prices. Then that word tariff was uttered. It took one word to put a bump in the road of our economy. As soon as the word was spoken (or Tweeted) the markets immediately showed their dismay.
This word tariff had been bandied about before as part of the many trade discussions which have taken place in the past few years. Sometimes the word just turns out just to be part of negotia...
