Sharkey, Howes & Javer

Inside the Economy: The Shift from Saving the Economy to Bettering it

This week on “Inside the Economy”, we discuss the path to recovery for the U.S. economy. The U.S. has been in damage control since COVID-19 shut down the economy earlier this year. As gross domestic product (GDP) numbers bounce back, the focus turns to those who are struggling to make rent and mortgage payments. How will the next stimulus package support those in fragile living situations? Third quarter consumer spending has boosted corporate profits, pushing the U.S. stocks higher. The corporate credit structure in China is a cause for concern, here’s what we are keeping an eye on. Tune in to learn more!

 

Key Take-aways:

• Third quarter GDP estimates up a positive 33.1% for the quarter, while interest rates slip slightly
• Americans are late to pay their rent and mortgages, with households in states like Kansas, Nevada and Wyoming being hit the hardest
• Consumer spending boosts corporate profits by 27.1%
• The U.S. dollar continues to decline
• China’s corporate bonds are seeing a drop in price and increase in defaults

Inside the Economy: Consumers & Markets

This week on “Inside the Economy”, we look at data points on one of the most important pieces of the economy, the consumer.  Retail sales continue to recover and climb higher with home fitness equipment and food delivery leading the charge. Will this trend continue with the rise in COVID cases across the U.S.? In the stock market, major indices continue to reach all time highs as volatility deflates. How will the stock market perform into 2021? Tune in to find out more! 

Key Takeaways:

• Unemployment is down slightly
• Core inflation is still mute.
• Junk bond yields, reach lows not seen since 2014
• The financial stress index has come back down to “normal” levels
• Stock market indices continue to rise

Inside the Economy: Holiday Spending and State budgets

This week on “Inside the Economy”, we continue to look at consumer spending. Consumers are shifting dollars from restaurants and travel to household items, gifts and workout equipment. This is evident by Amazon beating their earnings estimates for the quarter. An underwhelming part of the economy is state budgets. The pandemic has left states in deficits because of the loss of tax revenue. What will they do to recover? Will the Federal Reserve step in and help? Tune in to find out more!  

Key Takeaways:

• Consumers continue to spend more as the holidays approach
• Inflation is still below 2%
• Crude Oil is still below $40
• Unemployment data remains high and we expect it to level off
• The stock market indices experienced volatility in the days leading up to the election

Inside the Economy: An Improving Economy amongst COVID-19

This week on “Inside the Economy”, we explore the improving job market and current debt trends during the coronavirus pandemic. Unemployment rates continue to improve as people get back to work and stop collecting unemployment benefits. A combination of spending less and uncertainty surrounding the future has Americans paying down debt. Where are debt delinquencies increasing and where are they decreasing? Many U.S. citizens are sitting on additional cash, but how much cash is currently sitting in the U.S. banking system? Corporations continue to issue new bonds as money remains “cheap” due to low interest rates. Tune in to hear about all of this and more! 

Key Takeaways:

• Unemployment rates and outstanding benefit claims continue to decrease
• Unemployment benefits made-up over 30% of U.S. personal income, but has declined
• Outstanding consumer debt has reduced as Americans pay off loans
• There is currently over $12 trillion in cash sitting in American’s savings accounts
• Gross corporate bond issuance in 2020 has exceeded years past

Inside the Economy: Unemployment, Foreclosures and COVID 19

This week on “Inside the Economy”, we focus on the employment trends. Unemployment remains high, however new jobs are being created in specific sectors. On a positive note, retail spending at non store retailers have increased year over year. Will this trend continue? The extra $600 per month of Federal unemployment has stopped and to no surprise, mortgage delinquencies are on the rise. We also look at remittances to Mexico, the dollar and gold prices. Tune in to find out more!

Key Takeaways:

• Unemployment remains high overall, but in pockets of the job market hiring is robust
• Retail spending continues to trend upwards
• Foreclosures and evictions are starting to increase
• Workers in the US are sending more money back to Mexico to support families
• Less oil transactions and international tourism are a few factors contributing to a weaker dollar and higher gold prices

Inside the Economy: Second Quarter GDP after COVID Shutdown

This week on “Inside the Economy”, we reflect on the gross domestic product (GDP) and employment trends from the second quarter. What was the impact on GDP as a result of the lockdown? As spending and employment rates continue to recover, what is in store for the remainder of 2020? More job openings are becoming available and temporary layoffs are returning to the workforce, but what is the trend with permanent layoffs? Consumer spending has been down since many are staying closer to home, but it seems as if stimulus spending has helped boost spending during this difficult year. What industries have seen the direct impact of restricted spending? Tune in to hear this and much more!

Key Takeaways:

• GDP declined at an annual rate of 32.9% in Q2 of 2020.
• Temporary layoffs have dropped, but permanent job loss has been slowly climbing
• Job openings are beginning to increase 
• Decreased spending has led to less outstanding credit as Americans have more money to pay off loans and credit cards
• Travel, real estate, consumer discretionary, and energy have all seen the impact of the stay-at-home order

Inside the Economy: The State of the Economy and COVID-19

This week on “Inside the Economy”, we continue to monitor economic data as it continues to improve. Fiscal stimulus comes in many forms, like the direct payments or federal unemployment benefits, and has totaled more than 12% of GDP. What will the next bill look like from Congress and how much more money will be added to the national debt? Gold has had a strong rally as buyers speculate on future inflation and the value of the dollar. What’s to come over the next several months? Tune in to find out more! 

Key Takeaways:

• Economic data continues to improve with retail sales, production increases, and housing data. 
• Stock market indices continue their recovery lead by big tech as earnings show better than expected. 
• Gold is rallying and another stimulus bill from Congress is coming soon.

Inside the Economy: The Pandemic Job Market and its Impact

Today on “Inside the Economy”, we examine the impact that COVID-19 has had on the U.S. job market. As a society, we have witnessed numerous recessions over the last 75 years but none quite like this. How will the uncertainty regarding Coronavirus effect unemployment over the long-term? As Americans wait to see what is next, many are sitting on more cash than usual. How is this impacting spending and has it affected stock market returns? Tune in to find out!

Key Takeaways: 

• COVID-19 spurred a dramatic change in unemployment numbers, different from previous recessions
• Although unemployment numbers remain high, we are starting to see an increase in hiring and job openings again
• We have seen an increase in mortgage delinquency but it is nowhere near 2008-09
• This year has been a volatile year for all asset classes but gold and 10-year Treasuries remain on top
• Corporate debt and money supply continue to climb

Inside the Economy: Consumer Spending and COVID 19

This week on “Inside the Economy”, we refocus on the biggest driver of the economy, consumer spending. Retail sales were up in May, auto sales are climbing back and sales of new homes returned to a level of normalcy. An upward trend in consumer spending is a sign of economic relief, however states and local governments may still have challenges ahead. How has COVID-19 affected state revenues and what is the implication for municipal bonds? Tune in to find out!

Key Takeaways:

• Consumer Spending is on an upward trajectory and May data showed a big uptick in retail, auto and new home sales. 
• Forbearances have mostly paused, and the housing market is returning to normal even though most states still are not allowing physical showings. 
• State and Local governments have seen a big drop in revenue. This may point to more aid from the federal government. 

Inside the Economy: Catching Up with COVID-19

This week on “Inside the Economy”, Americans have spent the last few months saving more and spending less. As spending begins to resuscitate, where are we seeing inflation in the system? We are starting to see an increase in travelers making their way through TSA but are nowhere near the 2.5 million flyers per day we saw during summer 2019. How are the airlines coping with the slower summer days? Through a volatile market, who are the current winners and losers? Tune in to find out!

Key Takeaways:

• Initial jobless claims are decreasing in Colorado while some are going back to work— others are still hesitant to spend their hard-earned money
• The demand for recreation services and outdoor equipment has increased prices 
• Home sales are picking back up as Americans are staying local
• Airlines are leaning on CARES Act Support to navigate through hard times
• The U.S. dollar has been losing strength in conjunction with oil prices and low interest rates