5-Chart Friday (10/2/20)

By Charlie Bilello

02 Oct 2020


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

1) US Jobs Comeback Continues, Slowly

661,000 jobs were added back in September, building on the gains from May through August. This was the smallest rate of change since February, but still a very large move in any historical context.

Created in YCharts

In February and March, 22.1 million jobs were lost and since then 11.4 million have been added back. This means the number of jobs remains 10.7 million below their peak or 7% of the prior high.

Created in YCharts

The US Unemployment Rate moved down to 7.9% in September, declining for the 5th consecutive month from a peak of 14.7% in April. Prior to the covid-related shutdowns it stood at 3.5%, a 50-year low.

One concern in the employment report was the decline in Labor Force Participation (from 61.7% to 61.4%), an indication that some of the unemployed have stopped looking for new work.

2) All About That Stimulus

The wild swings in the market continue, with any hint of a second stimulus bill being passed leading to an algo-driven spike while any news of no progress on a new bill leading to a decline.

Looking at a chart personal income, one can see why the market has become so dependent on more free money. Real Personal Income in the US is moving down sharply as the stimulus effect is wearing off.

The contrast between the chart above (which includes government payments) and the chart below (which does not) has never been more stark.

3) Stock Chart of the Year?

There are certainly many candidates for the most amazing stock charts of 2020, but Crocs is one of the most interesting.

It fell 81% from its January high to its March low and has since rallied over 440%. This week it hit its highest level since October 2007. $CROX

Created in YCharts

Crocs was once a high flying momentum stock back in 2006 and 2007 after its IPO. It remains 38% below its high from 13 years ago.

Created in YCharts

4) Dividend Decline Continues

Dividend info for the 3rd quarter is in and the cuts continue. Overall, the S&P 500 showed a dividend decline of 5.6% versus the 3rd quarter of 2019.

From their all-time high in Q1, S&P 500 dividends are now down 9%.

During the last 3 recessions, these were the peak-to-trough declines in dividends…

  • 1990-91 recession: -13%
  • 2001 recession: -15%
  • 2007-09 recession: -30%

5) Big Smaller Oil

Exxon Mobil hit its lowest level since March this week and is down 50% on the year.

Created in YCharts

Exxon had a market cap of over $519 billion in October 2007. It is now down to $140 billion, a 73% decline. $XOM

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

Have a great weekend everyone!

-Charlie

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About the author

Charlie Bilello

Charlie is the founder and CEO of Compound Capital Advisors.

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