Daily Archives: September 3, 2020

Before starting, it’s important to remember that the U.S. employment report presents statistics from two major surveys, the Current Population Survey (CPS; household survey) and the Current Employment Statistics survey (CES; establishment survey). The most important thing is that, according to the BLS, “For both surveys, the data for a given month relate to a particular week or pay period. In the household survey, the reference period is generally the calendar week that contains the 12th day of the month. In the establishment survey, the reference period is the pay period including the 12th, which may or may not correspond directly to the calendar week.”


Focusing on high frequency indicators, the signals point to continuing improvement in August. Real-time labour estimates produced by academics at Arizona State University and Virginia Commonwealth University showed that the most recent RPS employment rate estimate, for the week August 9-15, is 63.8%, 2.1 ppt above the estimate from early July.

Source: Bick A. and Blandin A. (2020), Real-Time Labor Market Estimates During the 2020 Coronavirus Outbreak∗


Using seasonal adjustment, real-time data from Homebase also imply an improvement compared to July. In its monthly report for August, Homebase underlined that “BLS employment levels reported this week may show a slight improvement in activity, even though the general trend has been largely flat. Nonetheless, the July to August improvement is less than the June to July improvement.


Ahead of Friday's #JobsReport release, we just published our monthly update on Main Street perspectives (full report here: https://t.co/mjcyf2Xuk0). Here's what we found: pic.twitter.com/uBU2vhYuwx

— homebase_data (@homebase_data) September 2, 2020


Lastly, the Labor Department data also showed that employment conditions have improved a bit since mid-July with initial jobless claims falling to 1,104k in the week ending Aug. 15 (down from 1,422k in the week ending July 18).


US Weekly Initial Jobless Claims Report – DOLhttps://t.co/tRHpu7676z pic.twitter.com/2tMaTpTzdD

— LiveSquawk (@LiveSquawk) September 3, 2020


Signals from monthly surveys were more disappointing. ADP reported Wednesday that private payrolls increased by just 428,000, well below the Bloomberg consensus of 1.0 million, but above prior figure of 212,000 in July. Separately, the two ISM surveys (Manufacturing and Services) showed that the employment component remained in contraction territory (below the expansion threshold of 50) in August, respectively at 46.4 (v 44.3 prior) and 47.9 (v 42.1 prior).


Finally, looking at specific factors, in a recent post, Bill McBride highlighted that the Census Bureau released an update on 2020 Census Paid Temporary Workers, which suggests that the employment report will be artificially boosted by Census workers (+237.8k) in August.


August Employment Report Will Show an Increase of 237,800 Temporary Census Workers https://t.co/0MfpRv1h0i pic.twitter.com/TyS12IrXtm

— Bill McBride (@calculatedrisk) August 25, 2020


However, back-to-school-related hiring usually begins in August. In this context, issues concerning the return to schools may start to impact hiring. Therefore, the previous statistical boost from public-sector education observed in July report (local government education: +215k & state government education: +30k) will normalize and even reverse in August.


To summarize, high frequency and monthly indicators suggest that nonfarm payrolls kept rising in August but at slower pace than in July (1,763k). In addition, the statistical boost from public-sector education observed in July report is likely to reverse in August. Therefore, it seems that risks associated to the Bloomberg consensus forecast of +1,350ke look skewed to the downside, especially in a context where Donald Trump didn’t talk about better upcoming employment figures this week (like he did last month).


According to the European Centre for Disease Prevention and Control, 22 European countries have crossed a key threshold of new coronavirus infections. Latest data showed that the countries have recorded cumulative 14-day infection totals higher than 20 per 100,000 inhabitants, considered an early alarm level by many health experts.

Source: European Centre for Disease Prevention and Control (data as of Sep. 2nd)



#Germany's confirmed #coronavirus cases rise by 1,311 on Thursday (v 1,256 prior and 1,507 last Thursday) – RKI
*Link: https://t.co/LoHFnnUCU0 pic.twitter.com/Y0JhvgvksB

— Christophe Barraud (@C_Barraud) September 3, 2020



*Link: https://t.co/LXG9UPxXtP

*Total new cases (regional data): +8,581 ⬇https://t.co/BYvOExjg4I

— Christophe Barraud (@C_Barraud) September 2, 2020

#Belgium: From 04/09 at 16.00, the entire country of #Spain, except Tenerife, will be considered a red zone.
*Link: https://t.co/ioaOhknv9F pic.twitter.com/23XRSxc5jS

— Christophe Barraud (@C_Barraud) September 2, 2020



*Positivity Rate: 4.3%❗(v 4.3% prior).
*Santé Publique France: https://t.co/bZLT3Rguuz pic.twitter.com/8l3MiNpNIT

— Christophe Barraud (@C_Barraud) September 2, 2020

Mise à jour avec les données du jour pour les tests (30/08). La semaine 35 (semaine dernière) est maintenant complète. pic.twitter.com/dYtJuMbQIi

— Germain Forestier (@gforestier) September 2, 2020



*Link: https://t.co/FWQszjNVxD pic.twitter.com/g5d4Tedx2c

— Christophe Barraud (@C_Barraud) September 2, 2020



Daily New Confirmed Cases (7-day moving average)

*Note: Data can’t be directly compared to lockdown period amid methodology change and increasing frequency of tests (see below).


Daily New Tests (7-day moving average)


Positivity Rates (7-day moving average)


Daily New Confirmed Deaths (7-day moving average)


Robinhood is under investigation related to the disclosures around its practice of selling clients’ orders to high-frequency traders.

The SEC’s probe is at an advanced stage and could result in a fine of $10 million+ if the company agrees to settle. https://t.co/dJ8psVnhXw

— CNBC Disruptors (@CNBCDisruptors) September 2, 2020

Lately, When Analysts Say Buy, It Has Paid to Do What They Say – Bloomberg
*Quant factor tied to price-target changes is outperforminghttps://t.co/PjvqUXBG20

— Christophe Barraud (@C_Barraud) September 3, 2020

The big theme of the Fed's Beige Book is uncertainty:
1. Uncertainty over course of the pandemic;
2. Uncertainty over fiscal policy;
3. Uncertainty over childcare and outlook for schools;
4. Uncertainty over skipped rents. https://t.co/SnxT1BujeW via @economics @chrisjcondon

— Steve Matthews (@SteveMatthews12) September 2, 2020

Fed's John Williams: New policy regime will help Fed achieve job, inflation goals https://t.co/FYoJtE8AOm

— Real Time Economics (@WSJecon) September 2, 2020

Fed's Daly urges more government spending to boost economy https://t.co/hz1rceE3JW pic.twitter.com/SzXrgMSI3a

— Reuters Business (@ReutersBiz) September 3, 2020

The U.S. federal budget deficit will soar to a record $3.3 trillion this fiscal year, according to the Congressional Budget Office’s latest tally https://t.co/8hWmpNjAln

— Bloomberg Markets (@markets) September 3, 2020

#WhiteHouse Poised to Set Boundaries of WeChat, TikTok Crackdown – Bloomberghttps://t.co/NofGiyvq5A

— Christophe Barraud (@C_Barraud) September 3, 2020

US puts new restrictions on Chinese diplomats – FThttps://t.co/E787Wp39WN

— Christophe Barraud (@C_Barraud) September 2, 2020



— Christophe Barraud (@C_Barraud) September 3, 2020

#China Is Said to Plan Broad Chip Sector Support to Counter Trump – Bloomberg
* A suite of measures to bolster research, education and financing for the industry has been added to a draft of the country’s 14th five-year plan. pic.twitter.com/oX7NySUMMi

— Christophe Barraud (@C_Barraud) September 3, 2020

China Foreign Ministry: President Xi Will Deliver Speech At China International Fair For Trade In Services On Sept 4

— LiveSquawk (@LiveSquawk) September 3, 2020

Warning signs are flashing for China’s banking industry, just when Beijing needs it the most https://t.co/i124c0uTBV

— Bloomberg Economics (@economics) September 3, 2020

Australia’s trade surplus narrowed in July, with overseas shipments underpinned by record gold exports, while imports jumped on increased consumer goods https://t.co/mSvCJ1SEaE

— Bloomberg Asia (@BloombergAsia) September 3, 2020

India bans another 118 mobile apps including Tencent’s PUBG app as it takes aim at China tech https://t.co/d4twXtHIbN

— Reuters China (@ReutersChina) September 2, 2020

Who is Chief Cabinet Secretary Yoshihide Suga? He is a front-runner to become Japan's next prime minister. #Suga #菅義偉https://t.co/L5usepPGEg

— Nikkei Asian Review (@NAR) September 3, 2020


European markets set to rise with economic data in focus https://t.co/4bHpfWMxR1

— CNBC (@CNBC) September 3, 2020

Fresh vaccine hopes, Brexit worries, French stimulus. Wake up to Thursday. https://t.co/464zuZCgFp

— Bloomberg Asia (@BloombergAsia) September 3, 2020

#Europe #Covid_19: Daily Summary (September 3rd)https://t.co/fFT9V3BFB2

— Christophe Barraud (@C_Barraud) September 3, 2020

#Belgium: From 04/09 at 16.00, the entire country of #Spain, except Tenerife, will be considered a red zone.
*Link: https://t.co/ioaOhknv9F pic.twitter.com/23XRSxc5jS

— Christophe Barraud (@C_Barraud) September 2, 2020

#Spain | Markit: "There were many reports that fresh outbreaks of #COVID_19, weakness in tourism numbers, and a reluctance amongst clients to commit to new business had all undermined overall sales"https://t.co/jZkgRLKn7g

— Christophe Barraud (@C_Barraud) September 3, 2020

#EUROZONE AUG FINAL SERVICES PMI: 50.5 V 50.1E (confirms 2nd month of expansion)
– Composite PMI: 51.9 v 51.6e (2nd month of expansion)
*Link: https://t.co/wCzQKVKyWf pic.twitter.com/LFTvpSvwPW

— Christophe Barraud (@C_Barraud) September 3, 2020

#France | Macron Throws 100 Billion Euros at French Economic Relaunch – Bloomberghttps://t.co/aWnedbd8Yt

— Christophe Barraud (@C_Barraud) September 3, 2020

French economic recovery plan should create 160,000 jobs: PM https://t.co/0GDbWR3b6b pic.twitter.com/xTO7X698CG

— Reuters Business (@ReutersBiz) September 3, 2020

#Germany | Merkel’s Party Backs Plan for Extra Deficit Spending Next Year – Bloomberghttps://t.co/B1DsdAen9c

— Christophe Barraud (@C_Barraud) September 3, 2020

Rising euro stokes #ECB worries over falling prices – FThttps://t.co/a48uxlF9DH

— Christophe Barraud (@C_Barraud) September 3, 2020

Magical Nonstop Rally Evokes Peak of Dotcom #Bubble – Bloomberg
*Another great piece from @johnauthers
*Nice quote from @ForexLive
*Link: https://t.co/EYqXlUP7BW pic.twitter.com/fyOiivuJ8a

— Christophe Barraud (@C_Barraud) September 3, 2020

Corporate #zombies: Anatomy and life cycle – BIS
*HT @tracyalloway
*Link: https://t.co/YqzrDMGVpk pic.twitter.com/dBHCAREDvf

— Christophe Barraud (@C_Barraud) September 3, 2020

As toppy as it gets.

Financial conditions are flashing warning signal for stocks.

Lowest level since the peak of the tech bubble.

Prior lows also preceded or coincided with key market tops.

Tech bust, GFC, EM crash and Volmageddon. pic.twitter.com/JHuY8Sb5Cd

— Otavio (Tavi) Costa (@TaviCosta) September 3, 2020

This is the highest VIX ever at an all time high in the S&P pic.twitter.com/IIzTgtN1YB

— zerohedge (@zerohedge) September 2, 2020

A near-record % of NASDAQ 100 stocks are overbought (RSI > 70).

In the past, this ALWAYS led to a stock market pullback over the next 2 weeks.

Looking at the past few years more closely, this occurred near the market's top in January 2018 & January 2020 pic.twitter.com/tPgSsfDsJh

— SentimenTrader (@sentimentrader) September 3, 2020