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7 charts from the past week that tell an interesting story in markets and investing…
1) Jobs Jump
The US Unemployment Rate moved down to 5.4% in July, its lowest level since the start of the pandemic.
22.4 million US jobs were lost in March-April 2020. In a little over a year we’ve regained 16.6 million of them, but that still leaves us 5.8 million below the prior high.
The good news is that unlike prior recessions, the jobs are already there, waiting for employees to come back and fill them. There have never been more job openings in the US than there are today (9.2 million). This now exceeds the number of unemployed by over 500k.
2) New High in Earnings, Stocks
With 83% of companies reporting thus far, S&P 500 earnings are on pace to hit another record high in Q2.
S&P 500 sales are up 20% over the prior year, the largest year-over-year increase ever.
Stocks have responded with the S&P 500 hitting its 44th all-time high of the year on Friday.
3) Buy Now, Pay Later
Square ($SQ) hit new highs this week after announcing a deal to acquire Afterpay for $29 billion in stock. Afterpay allows users to pay for good in four interest-free installments (“buy now, pay later”), and will be incorporated into Square’s “Seller” and “Cash App” products.
This is a remarkable turnaround for Square, who’s market cap dipped below $20 billion in March 2020 when the pandemic first hit. The company now has a valuation of $126 billion, over 43x higher than is market cap at its IPO in 2015 ($2.9 billion).
4) Rising Rents
Rental prices are rising across the country, up over 11% year-to-date. While prices initially dipped after the pandemic they have surged higher this year and are now well above the pre-pandemic trend.
REITs in the sector have benefitted from this trend, gaining 33% this year ($REZ ETF) versus a 19% gain for the S&P 500.
5) Softbank Slump
Softbank (Japanese conglomerate and major tech investor) shares fell to their lowest level since last November, down 39% from their high in February.
Meanwhile, the tech-heavy Nasdaq 100 index continues to hit new highs, and is now on pace for its 13th consecutive positive year…
6) Robinhood Riches
Robinhood ($HOOD) shares surged higher this week, reversing early weakness following its IPO on July 29. At its high on August 4th, the company had a market cap of $71 billion, more than double its valuation at IPO pricing ($32 billion) and over 6x higher than its Series G valuation last August ($11.2 billion).
7) Rising Delta
The Delta variant continues to spread at a rapid pace, with new covid-19 cases rising to over 90,000 per day, their highest levels since mid-February. It is believed that the Delta is over 2x as transmissible as the original strain.
While all areas of the US are showing an increase in spread, the wave in the South started first and it continues to be hardest hit region thus far.
And that’s it for this week. Thanks for reading.
Have a great weekend everyone!
-Charlie
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