This month, Jason Weaver discusses pre and post pandemic numbers. He covers interest rates, S&P 500 earnings, and unemployment.
Interest Rates
Long-term interest rates plummeted during the pandemic and economic shutdown but have begun to rise again.
The 10-year Treasury yield has risen above 1% recently due to the ongoing recovery and reduced political uncertainty.
Rising long-term interest rates are often a sign of the early phases of a business cycle.
10 year
1/1/2020 = 1.92
2/19/2021 = 1.34
2 Year
1/1/2020 = 1.59
2/19/2021 = 0.11
S&P 500 Earnings
The Pandemic and Economic shutdowns halted consumer spending.
The halt in spending devastated corporate earnings.
Economies reopening, E-Commerce comfortability, and pent-up consumer demand has allowed corporate earnings to sharply recover.
According to Goldman Sachs, earnings per share for S&P 500 companies will climb in the Q4 2020 YoY.
Q4 2019 Forward P/E: 18.4
Q4 2020 Forward P/E: 22
5 Year Average Forward P/E: 17.6
Unemployment
Unemployment jumped during the economic shutdown and quarantines that took place in 2020.
Job gains were unexpectedly swift once the economy began to reopen, pushing the unemployment rate down.
Unemployment is still much higher than average and could take years to fully recover.
Unemployment Rates:
December 2019 = 3.6%
January 2021 = 6.3%
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