The economy is booming and everyone should enjoy it. The American economy is benefitting from tremendous amounts of pent-up demand and in some of the hardest-hit industries’ activity is beginning to tick back up above 2019 levels. Along with that boom, there are clear signs of inflation and concerns about overheating. Even Janet Yellen seemed concerned for a few hours last week.
Succinct Summary: It was hard to pay attention to anything other than politics last week, but we’re trying our best to keep a focus on the economy. Economic activity appears robust from the earnings reports that we’re reading. Even the hardest-hit industries appear to be performing much better than expected. The tech industries that surged may be normalizing though. We’re getting a strong new surge in Covid cases, but people seem to feel more prepared than they did last spring.
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Succinct Summary: The Great Recession of ’08 pales in comparison to the kind of recession that we have here. The UK just recorded the worst quarterly recession on record. The virus levels remain stubbornly high in many places. The hope comes from the modest recovery in some hard-hit industries.
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Succinct Summary: There were a lot of major data points about the economy last week but the biggest news of all seemed to be just how well tech companies did despite the massive economic dislocation. In a quarter where GDP fell at a 33% annualized rate, Apple managed to grow revenue by 11%! Stimulus probably played some role in tech companies’ strong performance, but beyond the stimulus is the fact that COVID has pushed everyone to spend even more time at home and on the internet. The behavioral shifts appear to be long-lasting too. 20 years after the dot com bubble, the internet is still not done reshaping society.
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Succinct Summary: Demand continues to bounce back but there are signs that a second wave of Covid may be bubbling up.
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Succinct Summary: We are clearly in a recession with very low visibility on how we are going to come out of it. Companies are also seeing consumers move away from credit as they also shift away from discretionary spending. On the positive, there are some promising signs of recovery as shorter cycle businesses like auto come back.