Transcript:
Tom Vaughan:
Hello, everybody, welcome to Wednesday, the S&P 500 was up .07% today. But really the big news, in my opinion was the Dow Jones hit an all time high, you know, that’s an index that goes back to the 1800s. And today’s the highest it’s ever been. So really good. We’re seeing some great things. And we’re sitting all time highs pretty frequently on most of the indexes, NASDAQ’s a little bit soft.
But what I’d like to talk about today is just kind of looking forward, there are two main things I’m really watching for to see where things might go. And so first of all, is just how many jobs are being created. And so I’ll give you an example this Friday, we have a report coming out for the jobs for April. Well, if you remember, last month, they reported for March, supposed to be 770,000 new jobs turned out to be 916,000 new jobs, I think that’s a great thing. So now they’re thinking maybe a million jobs for the last month, but I’m starting to hear rumblings that it could be really high, it could be a lot higher than they thought maybe a million and a half and 2 million. Well, here’s the weird thing about that, that probably makes the market go down in the short term, which I know sounds completely counterintuitive, because more jobs ultimately means more money, and more money means more economic growth, and ultimately more earnings, and ultimately a higher stock price. And, but a lot of jobs really fast, create sort of a possible shortage of employees. And that creates an inflationary situation.
And so, again, what’s happening right now is that the market doesn’t believe, the Federal Reserve. And that’s why like yesterday, when Janet Yellen who’s the Treasury Secretary, used to be the Federal Reserve Chairman, mentioned that they might have to raise rates, you saw a pretty big drop down in a pretty broad across the base, because that’s the big concern. And so the biggest push on inflation isn’t as supply chain issues, which we talked about yesterday, that’s a big deal. But it’s not the biggest one, the biggest one is employment. When employment gets really low, and they have to pay more for those employees. And that’s one of the shortages are having right now is just having enough employees to get things done.
And so anyway, it’s really fascinating, we’ll see what happens. But I think it’s a good thing. You know, unemployment was down to 3.3% before the pandemic started. It’s at six right now. And we didn’t have inflation before. So there are other factors that fit into the overall inflation, the Federal Reserve has been very specific in saying they’re expecting inflation to go up this year, maybe even exceed their targets. They’re okay with that, they’re expecting inflation to settle back down next year, once the supply chain issues get worked out, once this employment situation gets worked out. And so I actually think there’s some other pieces there that because of the pandemic, we’ve created this more efficient scenario, especially in the area of technology, tremendous amount of money spent by companies to kind of set things up in a very efficient manner and pushed us farther into the digital divide so to speak, much faster.
I think that saves money, also, in terms of inflationary pressure. So I think that, might be an issue here in the short term, it’s something to watch for. But I do think that, ultimately, that does work out. The other issue is obviously the virus. So there’s lots of things you can look at with the virus, you can look at the count, local, national, different countries worldwide, etc. You can look at the vaccine delivery, which I find very fascinating here in the US, across the world, those types of things. But I’d say the one area that I really look at is what’s called the Mobility Data.
So Mobility Data is just basically they contract your phone’s moving around. And so they say, “Okay, this is how much it used to move and how much it’s moving now.” So for example, here in the US, the Mobility Data is about 19% lower than it was in February of last year. Just means that about one in five people are still moving around less than they were, before the pandemic. And so,look at different countries, and you can look at the whole thing. The reopening is going to be about that Mobility Data, the more people are out and going to restaurants and traveling and doing different things, the more money is going to be spent in these areas. And that’s what we’re invested in right now. And so you can really watch that.
So it’s in some places, it’s gone backwards. So India was at around 19%, also lower than it was it’s jumped, dropped all the way back to 47%. With their big outbreak people are sheltering in place more. And so, we’ve seen some countries moving closer and closer to being back where they were before the pandemic started. And then some are going backwards. But that if you watch that, if you watch Mobility Data, especially globally, and you start to see that continuously moving down, that’s reopening. And that’s a great sign of what’s happening with reopening. So you can see very clearly why reopening is kind of hit and miss right now. It’s still kind of herky jerky so to speak because the Mobility Data is the same, it’s all over the place. It has not been an even reopening. But it is I think picking up pace in a lot of different countries. So I think we’ll see some good results out of that.
But that’s what I’d be watching. Watch the employment numbers and see what happens there. Because that’s part of a full economic recovery, very important component of it also impacts the possible inflation that might happen. And then watch this Mobility Data. And it really will show you kind of what’s happening in terms of this reopening as far as that goes. So anyway, pretty good day today. Actually, we had quite a few pieces that did better than the S&P 500. I was very pleased with that. So let’s see what happens tomorrow. I look forward to talking to you then. Thank you.