Our new friend, volatility Two major stock indices – the S&P 500 and Dow Jones Industrial Average – closed lower for the fourth straight week after a good bit of volatility. If you remember, I had mentioned a while back that the stock market seemed overpriced, especially given the fact that we’re still in the middle of a pandemic. That, plus uncertainty about the election, rising COVID-19 cases, and declining hope for any additional federal stimulus this year all added layers of risk for investors to parse through.  Moral of the story: I think the market is going to basically be in this same type of holding pattern for the foreseeable future.…

Nobody’s shopping for a new fall wardrobe  Retail sales increased for the third straight month in August but the momentum of recovery definitely seems to be losing steam. Sales increased 0.6% overall with spending at bars and restaurants seeing a sizeable boost – up 4.7% in the month. Even though sales have been improving in many categories, sales at restaurants are still down about 15% compared to last year and sales at clothing stores are down 20% compared to last year. All summer I think I maybe wore 6 real people outfits. Moral of the story: Retail sales are a major component of consumer spending, which accounts for about 2/3 of…

Taking a wrong turn  In an unfortunate turn of events, it seems like the labor market recovery has halted and even slightly reversed. Last week, new unemployment claims increased for the fourth week in a row. New jobless claims under the state and federal programs increased to 1.69m last week from 1.59m the week before. More concerningly, continuing claims also increased slightly to 13.4m, which was the first time this measure has increased in the last five weeks.  Moral of the story: This could be driven by the return of federal unemployment benefits ($300/wk by executive order) or could be indicative of a new wave of layoffs as businesses try…

The last official week of summer  Economic data was pretty scarce during this last official week of summer and the only meaningful piece of information received was the August jobs report. The US created 1.4m jobs in August and the unemployment rate fell to 8.4% (from 10.4% in July), marking the fourth straight decline in unemployment since the peak of 14.7% a few months ago.  Moral of the story: This jobs report exceeded expectations, especially given the concerns from rising COVID-19 cases over the summer reversing reopening across several states. Even though there’s some recovery across many industries, we’re still seeing ~800k new jobless claims every week. Industries related to…