5 More Things To Watch This Week

With massive uncertainty everywhere from the economy, to the coronavirus, to unemployment, to the protests and riots, to the upcoming election…

Things are a bit nuts.

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 so you can make better investment decisions.

Today I want to show you 5 More Things To Watch This Week that will affect your portfolio and the economy going forward.

  1. Earnings Season 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.

Why?

Because an estimated 70% of United States economic output is based on consumer spending… This is us doing stuff.

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

And tech companies and food producers and sellers are the biggest winners.

This week, 1 stock we’ve written about directly and one in an industry we’ve written about release updated earnings.

I’ll update you on these stocks as needed in the coming days.

Seeing quarterly and yearly earnings helps me understand what’s going on in the market via individual stocks…

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 I watch quarterly and yearly stock earnings… To help spot potential trends you can and should take advantage of.  And, to help you avoid serious issues.

Here are the important government data releases I’m watching this week.

2. Motor Vehicle Sales – Releases October 1st

This is important to watch to see how many vehicles people and companies bought in the last month in the United States.  Because this directly shows if people and businesses have money or not.

How?

If they have money, they buy stuff… If they don’t, they avoid buying stuff.

Both directly affect the economy either positively or negatively.

To find out more reasons this is so important read the following articles.

Last month there were 15.9 million vehicles sold in the US which is far below the 17.5 million sold per month at the beginning of this year.

But this numbers also been recovering since April.

Another move higher is a sign the economy is recovering.  A fall towards April’s number is a bad sign for the economy.

3. Initial Jobless Claims – Releases October 1st 

Pay attention to the trend.

From March until about June this number declined on a weekly basis.

The absolute numbers were horrific. But the decline was a great sign we’re headed in the right direction in terms of employment.

Then when coronavirus cases began exploding in July, unemployment started rising again.

  • Seven weeks ago, this fell below 1 million jobs losses for the first time since March 2020.
  • Six weeks ago, this jumped back to 1.1 million new jobs lost.
  • Five weeks ago, this was above 1 million new jobs lost again…
  • Four weeks ago, this fell below 900,000 new jobs lost.
  • Three weeks ago, this was below 900,000 new jobs lost again.
  • Two weeks ago, it was below 900,000 new jobs lost again.
  • And last week it was below 900,000 new jobs lost again, but the numbers rose from around 850,000 new jobs lost two weeks ago to 870,000 lost last week.

The trend down is good since March… But the rise last week combined with the continued high amount of job losses every week is a bad sign that shows the economic recovery may be slowing down.

4. Continuing Jobless Claims – Releases October 1st

For the same reasons as job losses above this is also ultra-important.

But a further note on this… It’s the number of people still receiving federal and state unemployment benefits each week instead of weekly job losses.

  • This amount began falling two months ago…
  • 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 three weeks ago to bring us up to 13.4 million continuing unemployed.
  • Then they fell two weeks ago to 12.6 million continuing unemployed.
  • And then they fell slightly to 12.58 million last week.

The trend here so far is good.

But we still need to watch this because there are still far too many unemployed people for a “healthy” economy.

This needs to fall 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.

5. United States Unemployment Rate – Releases October 2nd

This is important to look at to see what the “official” unemployment rate in the United States is.

More people working is better for the economy and each of us individually.

Fewer people working is worse for the economy and each of us individually.

I’m interested to see if this number stays below 10%…

Last month this fell below 10% and the official number should remain below this.  But if it rises due to the continued slowing of economic activity and hiring over the last month this would be a major negative sign for the economy.

I put official in quotes above and say it may be a sign of economic recovery because the “official” numbers released by the government aren’t the true numbers of unemployed…

They don’t count people who have stopped looking for work and people who are still getting paid but not working.

This unofficial number is estimated at above 10%.

But a rise in either of these numbers is bad.

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…

Click the links below to see the stocks we recommend helping Depression Proof Your Portfolio.

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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