Morning Commentary
It is a big day for the nation as we brace for the latest on the jobs front from the Labor Department. What I’m looking for beyond the headlines is more clarity on the level of actual job losses versus temporary layoffs. In April, most of those reporting to be out of work felt it was only temporary as many businesses choose furloughs to firings.
The wildcard is eight million people that are not working were classified as “other,” which historically averaged 620,000. If all were fired, 28 million people would have lost jobs and U4 unemployment rate would been 19.5%. There is hope today’s report is like ADP, which came in six million under consensus estimate.
Rotation Continues
Investors rotation continued out of safe havens and rate-sensitive sectors such as Real Estate and Utilities yesterday, as Treasury yields continue to increase. Selling in FAANG took the broader market with it. Financials and Industrials led the way and travel related stocks were among the winners, as investors continue to seek value in names that have been beaten down.
S&P 500 Index |
-0.34% |
|
Communication ServicesXLC |
-0.75% |
|
Consumer DiscretionaryXLY |
-0.50% |
|
Consumer StaplesXLP |
-0.48% |
|
EnergyXLE |
+0.02% |
|
FinancialsXLF |
+2.18% |
|
Health CareXLV |
-0.79% |
|
IndustrialsXLI |
+1.06% |
|
MaterialsXLB |
+0.36% |
|
Real EstateXLRE |
-1.87% |
|
TechnologyXLK |
-0.82% |
|
UtilitiesXLU |
-1.79% |
Portfolio Approach
We are adding a new position in Industrials and lowering Cash to 10%.
Today's Session
WOW. What a reversal. In May, 2.5 million nonfarm payroll job were added, and the unemployment rate fell to 13.3% from 14.7%. March was revised down by 492,000 from -881,000 to -1.4 million, and April was revised down by 150,000 from -20.5 million to -20.7 million, combined losses were 642,000 higher than previously reported.
Jobs in leisure and hospitality, construction, education and health services, and retail trade rose sharply as economic activity picked back up in May. Government jobs continued to decline. The labor Department stated, “These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it.”
Private Nonfarm Payroll
The real story remains in the number of people that have lost their jobs temporarily.
Reason |
May 2020 (in thousands) |
Job losers and persons who completed temporary jobs |
17,834 |
On temporary layoff |
15,034 |
Not on temporary layoff |
2,801 |
Permanent job losers |
2,206 |
Persons who completed temporary jobs |
595 |
Job leavers |
513 |
The market loves the report and future are soaring.
Comments |
How could have the entire Economic Community got this so wrong... Andrew B Newallo on 6/5/2020 1:50:07 PM |
Tweet |
4/25/2024 1:16 PM | Don't' Bury me, Yet! |
4/25/2024 9:27 AM | THERE CAN ONLY BE ONE |
4/24/2024 1:30 PM | Earnings Flood In |
4/24/2024 9:26 AM | BUYING THE DIP |
4/23/2024 1:25 PM | Bloom Off Rose |
4/23/2024 9:32 AM | WHAT HAPPENED TO THE BRAVADO? |
4/22/2024 1:22 PM | Pins and Needles |
4/22/2024 9:30 AM | LIVE BY THE SWORD … |
4/19/2024 1:20 PM | Fair Chunk of Rotation |
4/19/2024 9:35 AM | DON’T OVERREACT |
4/18/2024 1:37 PM | Didn’t Break Down |
4/18/2024 9:40 AM | MARKET OFF SCRIPT |
4/17/2024 1:59 PM | Facing Pressure |
4/17/2024 9:37 AM | POWELL STILL WANTS TO HELP |
4/16/2024 1:35 PM | Muted |
4/16/2024 9:42 AM | FEAR ARRIVES |
4/15/2024 1:17 PM | Making a Statement |
4/15/2024 9:45 AM | Equal Opportunity Drubbing |
4/12/2024 1:37 PM | Pressure Overall |
4/12/2024 9:42 AM | WHO YA GONNA CALL? |
4/11/2024 1:38 PM | No Urgency |
4/11/2024 9:27 AM | Tough Sledding |
4/10/2024 1:22 PM | Hang In There |
4/10/2024 9:51 AM | HERE COMES THE LATEST RATIONALE FOR PERSISTENT INFLATION |
4/9/2024 1:56 PM | Fighting the Trend |
More commentary archives |
Home |
Products & Services |
Education |
In The Media |
Help |
About Us |
Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.
|