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2 Things To Pay Attention To Today

With massive uncertainty everywhere from the economy, to the coronavirus, to politics, to the protests and riots… 

Today, I want to give you some clarity on 2 Things To Pay Attention To Today that will affect your portfolio and the economy…

  1. Earnings Season Continues To Roll On

Earnings season is here in full affect and companies are reporting generally poor earnings in the 2nd quarter of 2020.

This was expected due to the lockdowns and quarantines and overall lack of people doing things, buying stuff, and going places.

Why?

Because an estimated 70% of United States economic output is based on consumer spending.

So far banks, oil companies, restaurants, hotels, airlines, and car companies all appear to be big losers of this earnings season.

And tech companies and food producers and sellers appear to be the biggest winners.

Here are some of the most important earnings to release later today…  Including two companies we wrote about in recent articles that we recommend you buy.

Seeing quarterly and yearly earnings helps me understand what’s going on in the market via individual stocks… And this helps me spot potential trends to take advantage of and trouble areas to watch out for so I can let you know about them.

2. Government Data Release

Another major thing to keep an eye on – especially during crazy times like now – are when the US government releases updated financial and employment data.

Why do I watch this?

For the same reasons as above… To help spot potential trends you can and should take advantage of.  And, to help you avoid potential major problem areas.

The 3 biggest things I’m watching today are…

  • ADP Employment Data

ADP employment data is published once per month and focuses all on the employment and unemployment in the United States.

This is important because it lets us know how many people are still unemployed.  It will show how many more jobs were lost in June.  And the trend of job losses or gains from month to month.

The trend is the most important thing… Especially since coronavirus cases exploded in July.

If this led to more job losses and higher unemployment that’s a bad sign for the economic recovery.

This is all important because until the unemployment issue is fixed our economy will continue to crumble.

  • Trade Deficit

The second one I’m paying attention to today is the US trade deficit.

Generally, you want this trade deficit to be as little as possible – or even better if its surplus.

We haven’t had a trade surplus in a full year in the US since 1975 though.

And we’re not expecting one tomorrow.

The trade deficit is expected to be gigantic due to the economic issues related to the coronavirus and the huge amount of government spending in the quarter to offset the coronavirus and mass unemployment.

  • Markit Services PMI

This data is released once per month and is called the Purchasing Manager’s Index (PMI).

This number indicates the overall health of the economy based on a huge set of data including things like GDP, inflation, inventory levels, backlogs, etc.

Anything over a 50 shows the economy is growing.

And anything below 50 shows the economy is contracting.

This relates to the corporate earnings and employment data above which is why it’s so important.

Because again, until we fix the underlying economic issues – employment, spending, etc. – we’re going to be dealing with a declining economy.

I want to see this because with the explosion of cases of the Coronavirus in June and July I want to see the affect this had on the economic recovery we saw early signs of in May.

These are some of the biggest things to pay attention to in the market today.  And they’ll affect everything from your personal job and spending… To your retirement portfolio… To the entire economy.

Use the following links to some of our recent articles to learn other ways to protect yourself and your investments in these uncertain times.

Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.

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