Market Minute - November 10, 2020
There has been plenty of news over the past week for the markets to digest. Election results, a Federal Reserve meeting, corporate earnings, and positive news regarding a COVID-19 vaccine is quite the list. The vaccine news was welcomed by investors and the shares of companies hit the hardest by the pandemic. I would like to highlight just how hard hit some of these areas of the economy have been.
During the pandemic, we have seen an increase in the use of high-frequency data to track changes in the economy. The virus hit the economy with such speed that traditional measures were not catching the moves quickly enough in both directions. High-frequency data can be gathered far more quickly than traditional measures such as gross domestic product, which is reported on a quarterly basis.
The chart below from J.P. Morgan’s Guide to the Markets shows a set of high-frequency economic data through last Friday.
Source: App Annie, Chase, Mortgage Bankers Association (MBA), OpenTable, STR, Transportation Security Administration (TSA), J.P. Morgan Asset Management. *App Annie data is compared to 2019 average and includes over 600 travel and navigation apps globally, including Google Maps, Uber, Airbnb and Booking.com. Consumer spending: This report uses rigorous security protocols for selected data sourced from Chase credit and debit card transactions to ensure all information is kept confidential and secure. All selected data is highly aggregated and all unique identifiable information—including names, account numbers, addresses, dates of birth, and Social Security Numbers—is removed from the data before the report’s author receives it.
Guide to the Markets – U.S. Data are as of November 6, 2020.
The data included in the chart is primarily focused on travel, leisure, and restaurant spending which have been affected by social distancing measures. Airline travel is down 59% from pre-COVID levels which feed into several other categories such as hotels and restaurants. In contrast, the level of mortgage applications has risen showing strength in the housing market helped by the low-interest rate environment. Service-based sectors of the economy cannot return to normal with social distancing guidelines still in place. Ultimately, a vaccine will help restore a level of normalcy to this data over time once it is widely distributed.
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