Weekly Market Commentary

August 10, 2020

The Markets

There was good news and bad news in last week’s employment report.

The good news was the U.S. Bureau of Labor Statistics delivered better-than-expected data about employment. In July, the U.S. economy added about 1.8 million new jobs.

The flip side of employment is unemployment. The U-3 unemployment rate, which reflects unemployed people who are actively seeking a job, declined in July. It has moved steadily lower during the last few months, from 14.7 percent in April to 10.2 percent in July. The rate, which includes unemployed, underemployed, and discouraged workers, has declined from 22.8 percent in April to 16.5 percent in July.

The bad news is that, despite declining unemployment numbers, the U.S. unemployment rate is now at 10.2 percent

It is possible emergency unemployment benefits will restart before Congress reaches an agreement. On Saturday, President Trump issued an executive memo authorizing enhanced unemployment benefits of $400 a week. Three-fourths of the amount would be paid for with disaster relief funds. Regular unemployment benefits plus one-fourth of the emergency benefit would be paid by states.

It is also possible benefits won’t restart until Congress reaches agreement. “Although [President Trump] signed an order to provide enhanced unemployment benefits to millions of out-of-work Americans, it’s unclear if he has the authority to do so by executive order while side-stepping Congress. And, it could take months for states to implement,” reported Jessica Menton of USA Today.

Uncrowded

As professional sports resume play in empty stadiums, teams are finding innovative ways to support and encourage players and, sometimes, viewers. For instance:

  • The U.S. National Women’s Soccer League was the first contact sports league to return to play. Its fans offer support and encouragement via social media. In July, “the nearly 20,000-member [social media] group, NWSL Supporters, raised over $5,000 to cover the players’ coffee orders at the tournament’s on-site coffee truck, reported Nicole Wetsman of The Verge.
  • Japan’s Nippon Professional Baseball has robots that dance to the Fukuoka Hawks’ fight song before each game. Jack Tarrant of Reuters reported one humanoid robot and several four-legged robots, “…stamped and shimmied in a choreographed dance that is usually performed by the Hawks’ fans before games…”
  • S. Major League Baseball stadiums are filled with cardboard cutouts of fans. However, one broadcaster faked crowd noise and filled the stands with virtual fans in some shots, but not others. Overall, real fans were not impressed, reported USA Today.
  • The National Basketball Association is bringing basketball fans courtside through a virtual experience during live games. The ‘Together Mode for Teams’ uses artificial intelligence to segment fan’s faces and shoulders and show them in courtside seats. “This new experience…gives participating fans the feeling of sitting next to one another at a live game without leaving the comfort and safety of their homes,” reported Tom Warren of The Verge.
  • The Women’s National Basketball Association hosted the first-ever live virtual draft by a professional league. Sports Illustrated reported, “…the WNBA draft recorded its best ratings in 16 years. While [WNBA commissioner Cathy Engelbert] noted fans may have been hungry for a live sporting event, she also acknowledged the importance of naming Gianna Bryant, Alyssa Altobelli, and Payton Chester, who died in a helicopter crash on January 26, as honorary draft picks.”

Focus On The Positive

“Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish.”

–Sam Walton, Businessman and entrepreneur

 

Best regards,

Bill Spalding