📰 27: Initial Claims, and The Future of Stock Picking
Good morning and happy Sunday! This week I'm covering Initial Claims and some general thoughts on the market and our future as stock pickers.
What's New
- New piece on the VR wars between Mark Zuckerberg (META), and Tim Cook (AAPL). You can read it here.
- I made some behind-the-scenes improvements to the website experience for logged in members. 🥳
- Some front-end improvements are coming. 👀
Portfolio Performance
Almost six percent in a month is quite a bit. It's no surprise I lagged the market this month.
| MTD % | QTD % | YTD % | 1 Year % | Since Inception % | |
|---|---|---|---|---|---|
| S&P 500 | 5.15 | 6.91 | 6.91 | 29.58 | 10.07 |
| Portfolio | 5.94 | 6.41 | 6.41 | 46.64 | 23.37 |
Just to be clear, I'm not worried in the slightest if the market outpaces the portfolio on bull market run. However, I think I'm sufficiently protected from the downside through my own portfolio management.
Market Summary
It's quite amazing how far the S&P 500 has come this year:
Economy Update
It's initial claims this week!
What are "Initial Claims" and why does it matter?
Initial claims, often referred to as "initial jobless claims" or simply "jobless claims," are a statistical measure reported weekly by the U.S. Department of Labor. They represent the number of individuals who filed for unemployment benefits for the first time during a given week.
The significance of initial claims lies in their role as a leading economic indicator. Here's why they matter:
- Economic Health: Initial claims provide insight into the health of the labor market. When fewer people are filing for unemployment benefits, it suggests that fewer individuals are losing their jobs, which can be an indication of a strong economy. Conversely, an increase in initial claims may signal economic weakness or a downturn in the labor market.
- Consumer Spending: Unemployment and job insecurity impact consumer spending patterns. When more people are unemployed or fear losing their jobs, they tend to reduce spending, which can have ripple effects across various sectors of the economy.
- Policy Decisions: Government policymakers, including central banks and fiscal authorities, closely monitor initial claims data to assess the need for economic stimulus or intervention. High levels of unemployment may prompt policymakers to implement measures to stimulate job growth and support the economy.
- Investor Sentiment: Additionally, investors pay attention to initial claims data as part of their analysis of economic trends. Changes in initial claims can affect investor sentiment and influence financial markets, including stock prices, bond yields, and currency exchange rates.
- Business Planning: Businesses evidently use labor market data, including initial claims, to make decisions about hiring, expansion, and investment. High levels of unemployment or rising initial claims may lead businesses to be more cautious with their hiring plans or capital expenditures.
Overall, initial claims serve as a timely and important indicator of the health and direction of the economy, influencing a wide range of stakeholders, including policymakers, investors, businesses, and consumers.
Initial Claims Chart
One good thing the pandemic gave us was a look at what it actually looks like when unemployment skyrockets. Lately things are pretty calm.
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