5-Chart Friday (7/3/20)

By Charlie Bilello

03 Jul 2020

5 charts from the past week that tell an interesting story in markets and investing…

1) The King of Buybacks

Apple has bought back $338 billion in stock over the past 7 years, which is greater than the market cap of 492 companies in the S&P 500.

Chart via @ycharts

2) Top S&P 500 Stocks … Last 20 Years…

Data via @ycharts

3) Tesla the Terminator

Tesla continues to run, crossing above 1,100 and 1,200 this week for the first time.

At $224 billion, Tesla now has a higher market cap than GM, Ford, Fiat Chrysler, Honda, Daimler, and Ferrari … combined.

Chart via @ycharts

Revenues from those other automakers totaled $731 billion over the last year versus $26 billion for Tesla. The market is pricing in huge growth rates for Tesla in the years to come, and likely additional revenue sources outside of its core business.

4) No V in Employment

The US Unemployment rate moved down to 11.1% in June from 13.3% in May and 14.7% in April.

This is an improvement but still above the peak % in prior recessions:

  • 2007-09: 10.0%
  • 2001: 6.3%
  • 1990-1991: 7.8%
  • 1981-1982: 10.8%
  • 1973-75: 9.0%
  • 1969-70: 6.1%
  • 1960-61: 7.1%
  • 1957-58: 7.5%
  • 1953-54: 6.1%
  • 1948-49: 7.9%

But is the 11.1% number accurate? It’s likely underestimating the true rate as it’s based on household surveys and not actual data. The insured unemployment rate in the US (those actually collecting unemployment) remains above 13%.

Chart via @ycharts

5) The COVID Conundrum

COVID-19 Cases in the US continued to spike higher this week with 3 straight days of >50,000 new cases (all new highs).

Of most concern is the increasing % of positive tests which indicates increasing community spread. Hospitalizations also continue to move higher, up 20% in the past week.

Over the last month tests are up 54% while new cases are up 184%.

This emphatically disproves the “more cases are simply a result of more testing” theory. Even if testing had remained the same, cases would be up as the % of positive tests is increasing.

The good news continues to be that deaths have not yet risen, which is the conundrum many are pondering. I wrote a few reasons why this might be the case recently, the most important of which is the downward shift in the age distribution of those testing positive.

Who gets the virus is vital in predicting fatality rates, as evidenced by the 2 charts below.

  • Children under 15 are 19.8% of the population in the US and .02% of COVID-19 Deaths.
  • Adults 85 and older are 1.8% of the population in the US and 33.3% of COVID-19 Deaths.

Perhaps the most critical number (infection fatality rates by age) is still nowhere to be found but I’ve tried to estimate it with a few assumptions. As you can see, there is an enormous difference in risk of death depending on your age.

The question is whether we can continue to protect those most at risk (older population and those with underlying medical conditions) with the number of cases rising so dramatically, particularly in the South (Florida, Texas, Georgia, South Carolina, Alabama) and West (Arizona, California, Nevada).

Source: COVID Tracking Project

And that’s it for this week. Thanks for reading.

Happy 4th! Have a great weekend everyone!


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