6-Chart Saturday (4/3/21)

By Charlie Bilello

03 Apr 2021

Click Here for a replay of the Webinar I did with YCharts this week. We discussed 6 Long-Term Market Trends that have been showing signs of reversing.

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

1) The Jobs Recovery Continues

As the US reopening continues, jobs are coming back. The Unemployment Rate moved down to 6% in March, its lowest level since the pandemic began. In April 2020 it was as high as 14.7%.

The payroll report showed a gain of 916,000 jobs in March, beating expectations for a 658,000 increase. Total nonfarm payrolls are now 5.5% below their February 2020 high, up from a max of 14.7% last April.

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2) Housing Boom 2.0

The US housing boom continues with an 11.2% spike in prices over the last year, the largest increase since 2006.

Every city in the country has seen gains over the past year with many showing double-digit increases. The backdrop of record low supply (see 2nd chart below), low mortgage rates, and record stimulus is expected to continue to put upward pressure on prices in the months to come.

Data via YCharts

3) Manufacturing Boom

The ISM Manufacturing report this week showed the highest level of activity since 1983.

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The Prices Paid component of the report remained near a 40-year high, providing further evidence of rising inflation.

4) More Stimulus, Higher Taxes, More New Highs

President Biden unveiled some of the details in his $2 trillion infrastructure package this week. Here’s a breakdown of the major expenditures…

Included in the plan: an increase in the Corporate Tax rate to 28% (from 21% currently) to “fund the package within 15 years.” If approved, that would push the combined Federal/State corporate tax levels in the US back to the highest rate among OECD nations.

While the passage of the bill is likely still a few months away, it remains to be seen what the impact of any tax increases will be on stocks. For now, the beat goes on, with the S&P 500 crossing above 4,000 for the first time. During the depths of the crash last March it was below 2,200.

5) Best to Worst, Worst to Best

We’ve seen a 180 degree reversal in stocks this year with a mean reversion for the ages…

  • Top 25 stocks in the S&P 500 in 2020: median return of -3% thus far in 2021.
  • Bottom 25 stocks in the S&P 500 in 2020: median return of +32% thus far in 2021.
Data via YCharts

6) The Road to Herd Immunity

Over 100 million Americans have now been vaccinated with at least dose. A record 3 million shots per day have been given over the last week.

Importantly, over 3 in 4 Americans aged 65+ have now been vaccinated. As over 80% of covid-19 deaths have come from this age group, even if there is a 4th wave higher in cases (we’ve seen a slight move higher in last 2 weeks), we should not see a commensurate rise in hospitalizations/deaths.

We’re already seeing the impact of the vaccines with covid-19 deaths in the US hitting their lowest levels in 5 months, down 74% from their January high.

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

Have a great weekend everyone! Happy Easter/Passover to all that celebrate!


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Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For our full disclosures, click here.

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