Weekly Economic Report
Information continues to roll in suggesting that the economy is performing much better than expected – for profits and income, but not for jobs. Indeed, that is exactly the point. It is far too early in the cycle to be concerned about the level of employment. In the early correction phase, it is more important to establish which businesses will be profitable in the future and to provide enough liquidity that capital can flow their way. COVID has seriously redrawn the map of where investors want to focus. There is still significant risk that some sectors that currently look solid -- or dead -- will retreat or rebound, if and when a vaccine or cure is found. In other areas, the die is cast. Retail will never be the same, nor will work from home, and likely profound changes in education will become permanent. The need to reduce costs will drive entrepreneurs to entrench certain recent trends. The surfeit of liquidity generated by liberal monetary and fiscal policy promises that change will come much faster in this cycle than ever before.