5-Chart Friday (7/31/20)

By Charlie Bilello

31 Jul 2020


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

1) The Amazon Economy

It’s hard to imagine a scenario that would have benefited Amazon more than forcing brick-and-mortar stores to close and telling people to stay home.

And benefit they did, with 40% revenue growth in the past year, its 75th consecutive quarter of double-digit revenue growth.

Data via YCharts

Amazon’s revenue has increased every single year since its IPO, from $150 million in 1997 to an estimated $357 billion this year.

2) Haves and Have Nots

While Amazon is booming, the average company is not. Overall, S&P 500 revenue is down 13% in the past year and earnings down 47%.

The divergence between the “new” and “old” economy has never been wider, with companies like Boeing and General Electric suffering massive declines.

Data via YCharts
Data via YCharts

With ad revenue down, even the almighty Google reported a decline in Q2, for only the second time in company history.

Data via YCharts

Advertising spending also hit Facebook, which reported its slowest growth rate (+10.7%) in company history.

Data via YCharts

2) Golden Awakening

As the push for trillions more in stimulus and national debt continues, the US Dollar is plummeting, at its lowest level in 2 years.

And for the first time since 2011, Gold is at an all-time high.

In a rare consensus, both major political parties seem to be in broad agreement: we need to continue to borrow and spend our way out of this. The only debate is how much.

3) GDP Goes Down

US Real GDP in the 2nd quarter was down 9.5% over the prior year, the largest decline on record.

Max declines during prior recessions:

  • 2008-09: -3.9%
  • 2001: +0.2% (no decline)
  • 1990-1991: -1.0%
  • 1981-1982: -2.6%
  • 1973-75: -2.3%
  • 1969-70: -0.2%
  • 1960-61: -0.7%
  • 1957-58: -2.9%
  • 1953-54: -2.4%
  • 1948-49: -1.5%

4) The Recession that Boosted Home Prices

With mortgage rates at record lows (below 3% for the first time ever) and stimulus at record highs, the US housing market is not behaving as it typically does when there is a recession and spike in unemployment.

Home prices continued to hit new highs in May, up 4.5% year-over-year.

Phoenix led all major cities higher over the past year with a gain of 9%.

Data via YCharts

5) More than just the iPhone

Apple reported an increase in revenues during Q2 (+10.9% YoY) that widely beat expectations.

Data via YCharts

But unlike years past, the iPhone was not the driver, with sales up only 1.6%.

The transition to services continues to play an increasingly important role in Apple’s future, with revenue up 15% in the past year.

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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