Economic And Stock Market Concentration

The economy is already improving even though the 3rd stimulus hasn’t past nor has the pandemic been fully contained. We’re inching closer to containing it each weak. That explains why the chart below shows the recovery tracker in each region is improving with the Midwest doing the best and the Pacific doing the worst by a lot. This metric includes the pandemic as one of its inputs. In the week ending January 22nd, the national recovery tracker rose 2 points to 79.

As of Thursday, there have been 36.7 million vaccine doses given out in America which is 11.2 per 100 people. This has caused the 7-day moving average of positive cases to fall from 244,707 to 130,569. The 7 day average of people in the hospital has fallen from a peak of 132,474 to 88,668. These sound like amazing numbers, but remember, the prior hospitalization peaks in the spring and the summer were just under 60,000. We’re a couple of weeks away from getting back to the worst of the spring which is why we are surprised there has already been some improvement in the labor market. Imagine how great the data will be in March.

Another Better Jobless Claims Report

It’s not that investors are ruthless. It’s that investors jump the gun at the first sign of improvement. That needs to be understood because when the economy looks bad but is getting less bad, the stock market usually does well. If you are a policymaker, the labor market is terrible and needs support via higher jobless benefits. If you are an investor you see the potential for millions of jobs to be created once the economy reopens.

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