Goodbye summer, hello fall

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 leisure and events (sports, concerts, air travel) are still struggling and seem unlikely to recover until there’s a COVID-19 vaccine.


It’s hard to not think about the upcoming election with the number of political ads that are taking over my screens these days.Fueling that is the amount of funds coming into the campaigns right now – Biden raised $364.5m in August, which is higher than any single month of fundraising in previous presidential elections. To put the number into perspective, Hillary Clinton raised $143m last August while Trump only raised $90m. Interestingly, of the donations, 95% were from grassroots supporters and 1.5m people made their first donation in August. 

Moral of the story: I thought 2016 was a big election but 2020 feels almost monumental. People seem much more personally involved given the backdrop of what we’ve experienced this year, which is evident based on the grassroots fundraising happening for the Biden campaign. At this point, the market is probably less concerned about the pros and cons associated with the party that ends up in the White House and more concerned about the uncertainty likely to be associated with this election. Everyone is anticipating a large volume of mail-in ballots (likely to be used more widely by Democrats), and I don’t think anyone knows how this is going to play out. The market doesn’t like uncertainty, so I wouldn’t be surprised to see some rocky roads ahead. PS – you can text “VOTER” to 26797 to check your voter registration and see all the voting options in your state. 

Silver linings 

The end of the week was actually quite turbulent in the stock market, and it was largely driven by tech stocks correcting after a strong rally these last few months. The tech sector has really been a driving force for the broader market’s comeback from the pandemic lows in March, but valuations had become so rich that it’s not surprising the sector fell more than 4% this week.  

Moral of the story: Some of this correction is likely due to investors cashing in some profits after the strong performance these tech stocks (if there’s a large volume of sellers, supply is higher than demand and prices fall). Given this was just a price correction and the underlying fundamentals of the stocks are unchanged, this type of a pull-back provides a great buying opportunity for investors looking to get in. 

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