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The jobs recovery in work-from-home cities is fizzling out: Morning Brief

Friday, June 26, 2020

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Working from home is great if you already have a job.

In recessions, lots of bad things happen to the labor market.

Unemployment rises sharply.

Wage gains level off.

And the number of open jobs plummets.

All of which leads to dimmer prospects for those both employed and unemployed.

After a sluggish recovery for the labor market during the early part of the 2010s, data showing the number of workers quitting jobs on the rise, the number of job openings at record highs, and wages rising at the fastest rate in almost a decade were all signs that dynamism had returned to the labor market.

And while we’re still in the early stages of appreciating just how disruptive the current shock is to the labor market, data from

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The virus drives the economy: Morning Brief

Thursday, June 25, 2020

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There can’t be an economic recovery without a public health recovery

Stocks sold off sharply on Wednesday as all three major averages fell more than 2%.

Rising case counts and hospitalizations in Texas, Arizona, and Florida — among other states — continue to make clear there has been no nationwide containment of the coronavirus.

The spread of the virus has slowed considerably in the New York City metro area which was hardest hit in the spring, but data from this region now overstates the current state of the pandemic in the country. A record 38,762 positive tests were recorded in the U.S. on Wednesday, the highest since the pandemic began.

And while the pandemic has been a deteriorating situation for a few weeks now, Wednesday’s action is a

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The housing market rebound continues: Morning Brief

Wednesday, June 24, 2020

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New home sales data impress in May.

A day after existing home sales data for May disappointed, new home sales data topped expectations.

Suggesting the housing market did indeed bottom in March and April as buyers appear eager to step in.

In May, new home sales rose some 16.6% to an annualized pace of 676,000 units, according to data published Tuesday. Economists had expected new home sales in May to hit an annualized rate of 640,000.

Unlike Monday’s existing home sales data, which only tracks closings on previously signed contracts, new home sales counts signings for home purchases. And so whereas existing home sales data tends to be a lagging indicator of the health of the housing market, new home sales are a leading indicator.

And the

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Another economic indicator may have bottomed in May: Morning Brief

Tuesday, June 23, 2020

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Existing home sales plunged in May. Most think the worst is over for this reading.

For nearly two months, we’ve been chronicling calls from strategists and economists who believe the worst economic impacts from the pandemic are behind us.

And on Monday, another piece of economic data hit what most believe will be the reading’s nadir.

Existing home sales for the month of May fell 9.7% from April to a seasonally-adjusted annual rate of 3.91 million. Sales fell 26.6% from the same month last year.

“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, chief economist for the National Association of Realtors. “Home sales will surely rise in

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Why the stock market has gotten so expensive: Morning Brief

Monday, June 22, 2020

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High valuations appear justified, but beware the ‘wildcards’

As of Friday’s market close, the S&P 500 (^GSPC) was up 41% from its March 23 low.

The rally in stock prices along with declines in earnings forecasts have sent the S&P’s forward 12-month P/E ratio to 21.9, according to FactSet. This widely followed valuation metric is now way above its five-year average of 16.9 and its 10-year average of 15.2.

While this may seem scary, Wall Street’s top strategists see plenty of explanations for what’s happening. Though they also warn that the risks facing equity investors appear tilted toward the downside.

Stock market valuations have spiked as prices surge and earnings expectations tumble. (Factset)

Here’s a look at what the pros are chattering about:

Recent economic data

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