Dog Days Of Summer In The Economy
Published Friday, June 19, 2020, 7 p.m. EST
The dog days of summer are not supposed to come until August, but the virus crisis brought them early this year.
As the epidemic's economic effects ebb, uncertainty reigns and makes this time between recession and recovery odd.
But signs of recovery are already blossoming.
Retail sales for the 12 months through May were down -3.9%, compared to the 12-month period through the end of April. In the 12 months ended April 30, 2020, retail sales plunged -18.2% versus May's -3.9% 12-month pace.
The sharp improvement in retail sales last month indicates that the recession is likely to be one of the shortest in post-War history, just four months in length. In comparison, The Great Recession that followed the 2008 global financial crisis lasted about 18 months.
The U.S. Index of Leading Economic Indicators rose +1.1% in May, following a -4.4% contraction in April and a -7.4% decline in March, the largest decline in its 60-year history.
The Covid recession, which officially began in February 2020 is expected to end officially May 30. The recovery is likely to begin officially June 1.
The Standard & Poor's 500 (S&P 500) lost one-half of 1% Friday but gained 1.83% this past week. It closed Friday at 3,097.74, which is 32.25% over the March 23rd bear market low.
The S&P 500 closed last Friday with a +4.8% weekly gain, The index had gained 3% a week earlier and 3.2% the week before.
The Conference Board Leading Economic Index (LEI) components: 1) average weekly hours worked, manufacturing; 2) average weekly initial unemployment claims; 3) manufacturers' new orders consumer goods and materials; 4) ISM index of new orders; 5) manufacturers' new orders, nondefense capital goods; 6) building permits new private housing units; 7) stock prices, S&P 500; 8) Leading Credit Index ; 9) interest rate spread; 10-year Treasury less fed funds; 10) index of consumer expectations.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial situation, or particular needs. Product suitability must be independently determined for each individual investor.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
- Why Did Stocks Close At A Record-High After Disappointing Jobs Report?
- Americans Sit On A Mountain Of Cash Amid Pandemic
- For High-Income Earners And Families, Failing To Plan Is A High-Stakes Gamble
- Stocks Break Record, But Smart Money Is Focused On Taxes
- Wall Street Reacts To D.C With A 7% Weekly Gain
- On Election Eve, Here's The Economic Outlook
- Sizing Up Economic Prospects
- Two Good Economic Surprises
- October Surprise May Be The Economy
- Economic Signs Are Fine Amid The Distractions
- Poverty Rate Dropped Again In 2019; A Sign Of Progress
- Stocks Dropped Last Week But Data Confirmed Economic Recovery
- Amid A Mixed Week For Stocks, A Strong Recommendation
- Is A Stock Bubble Bursting?
- S&P 500 Breaks Record For A Second Week
- S&P 500 Breaks New Record; Small Business Picture Is Different
- As If Coronavirus Never Hit, Retail Recovers
- Confirming Recovery Is Under Way
- Despite Grim Headlines, Stocks Rose Sharply -- Why?
- The Paradigm Shift In Valuing Stocks
- Retail Sales And Housing Starts In June Reveal Recovery's Shape
- Keeping Perspective In An Unreal Environment
- Economic Fundamentals Recovering As Stocks Surged For the Week
- Stocks Swing Wildly As Economic Recovery Begins