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Year-End Outlook: Tracking the Post-COVID-19 Economy
As of late August, cases in the Sun Belt states are decreasing. Meanwhile, we continue to see more evidence of normalization in economic activity – including regional restaurant activity (takeout or outdoor seating, please) and travel data. Despite repeated delays and an apparent standstill in negotiations for further fiscal support, consumer spending and financial markets on the whole have proven resilient. While fears of the market attempting to force the hand of Congress persist, elevated personal savings in the US could be helping to provide an economic buffer while negotiations for further federal COVID-19 aid spending fail to yield results.
While we expect the recovery to continue, it is likely to follow a slower and more cautious path. Importantly, there remains a massive global effort under way to find a vaccine. Never before has the global scientific and medical community been as singularly focused. The potential for a vaccine sooner rather than later must be factored into one’s outlook.
Here are some further thoughts on questions we’ve been asked often of late:
Why did the market reach an all-time high in August?
Should I be concerned about a tech bubble?
What are the potential market effects of the November 3rd US elections?
How might the results of the US presidential election influence markets?
Would President Biden be bad for markets?
How important is further federal aid spending to the health of the economic recovery?
The Checklist
Issue | Comment |
Is the economy restarting?
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Business Activity Highlights
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Consumer Spending Highlights
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What is the Market Telling Us?
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Are Consumers Spending?
MBA Weekly Mortgage Purchase Applications (5/12/17–8/14/20)
Source: Natixis PRCG, FactSet, Bloomberg, tracktherecovery.org.
Restaurant YoY Revenue, Dine In (2/17/20–8/17/20)
Source: Natixis PRCG, FactSet, Bloomberg, tracktherecovery.org.
Redbook Retail Sales (5/15/17–8/14/20)
Source: Natixis PRCG, FactSet, Bloomberg, tracktherecovery.org.
Retail Sales (5/15/17–8/17/20)
Source: Natixis PRCG, FactSet, Bloomberg, tracktherecovery.org.
Is the Economy Restarting?
NY Fed's Real Activity in Real Time
Weekly Economic Index (1/5/08–8/15/20)
Source: Natixis PRCG, New York Federal Reserve, Oxford COVID-19 Goverment Response Tracker
NY Fed's Real Activity in Real Time
Weekly Economic Index (1/5/18–8/15/20)
Source: Natixis PRCG, New York Federal Reserve, Oxford COVID-19 Goverment Response Tracker
Oxford Lockdown Index: United States (2/1/20–8/17/20)
Source: Natixis PRCG, New York Federal Reserve, Oxford COVID-19 Goverment Response Tracker
Business Applications (1/4/20–8/8/20)
Source: Natixis PRCG, New York Federal Reserve, Oxford COVID-19 Goverment Response Tracker
What Is the Market Telling Us?
Stay Home vs. Reopen Composites (12/31/19–8/18/20)
Source: Natixis PRCG, FactSet
Reopen/Stay Home (12/31/19–8/18/20)
Source: Natixis PRCG, FactSet
Reopen Composite (12/31/19–8/18/20)
Source: Natixis PRCG, FactSet
Stay Home Composite (12/31/19–8/18/20)
Source: Natixis PRCG, FactSet
Natixis Distribution, L.P. is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.
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