7 Things To Watch This Week
With massive uncertainty everywhere from the economy, to the coronavirus, to politics, to the protests and riots…
Over the last few weeks, I’ve shown you the things I’m watching every week to see if the economy is recovering or stagnating and it now appears the economy is on its way to recovering.
Today I want to show you 7 Things To Watch This Week that will affect your portfolio and the economy. And show us whether we stay on the track to recovery or not…
- Earnings Seasons Continues Rolling
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.
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.
I’ll keep you up to date on what these means – if anything important – to the long-term prospects of the companies we’ve written about.
Two months ago, I showed you a few reasons to avoid FedEx…
And it releases its most up to date earnings this week, so I’ll update you on Fed Ex next week as needed.
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.
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.
Here are the major government data releases I’m watching this week.
2. Poverty Rate – Releases September 15th
This will show the poverty rate in the United States as of the end of August.
The last reading of this metric for July showed that 12.8% of the US population was in poverty.
If this fell again in August it’s another great sign we’re recovering.
If it rose it’s a sign the recovery may be stalling.
3. Federal Reserve Chairman Jerome Powell Press Conference – September 16th
This is important for many reasons…
Mainly to see what Federal Reserve Chairman Jerome Powell says about the state of the economy…
- Is it recovering?
- Is the recovery stalling?
- What does the Chairman expect out of the economy for the rest of the year?
- What does the Chairman expect in 2021 and beyond?
- How long does he think it will take to recover to Pre Covid level economic output?
The answers to these questions will be ultra-important to watch to see what you should expect in the short and medium term when it comes to the economy.
And its effects on all of us.
4. Retail Sales – Releases On September 16th.
Because 70% of the US economy is based on consumption – i.e. you and I doing and buying stuff. This number is also important.
Retail sales since the pandemic began in March are way down…
But last month they showed recovery by rising 1.2% in July.
This new data will show what happened in August to see if retail sales continued rising or if they continued recovering.
It’s another indicator of the direction of the economic recover – if there is one at all – is heading toward good or bad.
5. Housing Starts and Building Permits – Releases On September 17th
This will be important to see because it will show if people are still buying houses. If they are that’s a good sign for the economy. If they’ve slowed down, it’s a bad sign for the economy.
Because if this slows significantly it means people either don’t have the money to buy a house due to unemployment issues. Or that banks aren’t lending as much to people to buy houses.
Neither is good for the economy.
In July this showed 1.5 million homes we’re under construction which was a strong sign of the continued strength of the housing market.
If housing permits and starts are still rising that’s a promising sign of economic recovery.
6. Initial Jobless Claims – Releases September 17th
Pay attention to the trend.
From March until about June this number declined on a weekly basis… Even though the absolute numbers were still horrific. The decline was a great sign we were headed in the right direction in terms of employment.
Then when the coronavirus cases began exploding in July, unemployment started rising again on a weekly basis.
Five weeks ago, this fell below 1 million jobs losses for the first time since March 2020.
Four weeks ago, this jumped back above 1 million to 1.1 million new jobs lost.
Three weeks ago, this was above 1 million new jobs lost again…
Two week ago, this fell below 900,000 new jobs lost.
And last week this was below 900,000 new jobs lost again.
If the trend continues down this week, that’s a great sign of economic recovery.
If it goes back up it’s a sign the recovery may be stalling.
While numbers are still above all-time records before March 2020 it’s still a good sign we’re heading in the right direction.
Again, the trend here will be more important than the absolute number. And I’ll keep you up to date on this in the coming weeks.
7. Continuing Jobless Claims – Releases September 17th
For the same reasons as above this is also ultra-important.
But a further note on this one is that this is the number of people still receiving federal and state unemployment benefits each week.
This amount fell slightly a month ago which is a good first sign of an economic recovery.
Then it fell slightly the week after that…
Then again slightly the week after that…
Then again slightly the week after that…
But then they rose slightly last week to bring us up to 13.4 million continuing unemployed.
The trend here so far is good. But if this continues rising this week it’s a bad sign for the potential economic recovery.
Either way, we still need to watch this because there are still far too many unemployed people for a “healthy” economy.
You want to see this go down significantly over time because that means more people are back working.
And that’s a good sign not just for people and their families. But also, for the entire economy.
These are the major things I’m watching this week. I’ll keep you updated on all this going forward.
Here are the articles from the last week in case you missed any…
- 1 More Reason To Avoid Macy’s
- 1 More Reason To Avoid Nio
- 1 More Reason To Avoid DraftKings – Even With Michael Jordan Investing
- 3 Reasons To Avoid Five Below
- 1 Reason To Avoid Lululemon
Use the following links to some of our recent articles to learn other ways to protect yourself and your investments in these uncertain times.
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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.