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Weekly Market Recap: April 13, 2020

The week in review

  • Consumer sentiment at 71.0
  • Initial claims +6.6 million
  • Headline/Core CPI 1.5%, 2.1%

The week ahead

  • Retail sales
  • Industrial production
  • Housing starts

Thought of the week

Due to the COVID-19 crisis, the U.S. labor market has deteriorated at an unprecedented speed and magnitude. The March employment report showed a decline of 701,000 payrolls, and the unemployment rate rose to 4.4%. However, underlying classifications within the report reveal the uncertainty of workers during the early weeks of social distancing. As shown in this week’s chart, temporary layoffs increased by 1 million, versus a 177,000 increase in permanent layoffs, reflecting the anticipation that many temporarily closed businesses will be able to reopen. Given that the first two weeks of March were early in the social distancing effort, there was a 34% rise in those who were working parttime for economic reasons, including that their hours were reduced.

An untold number of workers also simply responded as employed but absent from work for “other reasons.” Self-employed workers remained committed to their businesses, with self-employment declining just 1%, while multiple job holders of varying hours, implying gig economy workers, declined 9%. Since then, an additional 16.8 million workers have filed initial claims for unemployment insurance, implying an unemployment rate of nearly 15%. In the months ahead, those on temporary layoff are likely to surge, but the hope is that expanded unemployment benefits and business loans from the $2.3 trillion fiscal package can keep workers and businesses afloat long enough to see a sharp rebound in employment once social distancing measures ease.

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Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

JPMorgan Distribution Services, Inc., member of FINRA.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc. and JPMorgan Asset Management (Canada) Inc.

©JPMorgan Chase & Co., April 2020

Unless otherwise stated, all data is as of April 13, 2020 or as of most recently available.

Disclosure: J.P. Morgan

Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

JPMorgan Distribution Services, Inc., member of FINRA.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc. and JPMorgan Asset Management (Canada) Inc.

 

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