This week was epitomized by two topics: Stock Market Volatility and the Wuhan Virus. The virus started in the Wuhan China. It is not racist to call it the Wuhan Virus or the Chinese Coronavirus or COVID-19. If this sounds familiar, it is. The Wuhan Virus has been a part of this column for well over a month. We had data on February Retail Sales, February New Construction, and February New Home sales that should have knocked either the Wuhan Virus or the Stock Market Volatility out of the headlines for a few hours.
(March 17) The first article of the week relayed positive information from the February Retail Sales Report. "Feb. Retail Sales: Some Good News" examined the month to month and February to February Changes. A week ago this column projected that month to month sales would decline and that February to February sales would accelerate. We had another record February. All sectors grew sales February to February, non-seasonally adjusted, and only Electronics and Appliance Sales (EAS) dropped seasonally adjusted from its February 2019 Level, and that was a drop of $79 million on $8.1 billion in sales last February. The media focused on the seasonally adjusted month to month decline that happens "every" February. Good news was ignored.
(March 18) Wednesday we received the "much anticipated" New Construction Report. New Home Starts and Units Under Construction were at February Levels not seen since
2007. The Completions data was almost identical to last February and both were better than the February 2007 data. "Huge Feb.New Construction Report (Ignored)" could have easily been titled "New Construction Starts up 20.52% Year to Date." Good news was dismissed as "rear looking."
(March 19) There was a spike in First-time Unemployment claims. This received major headlines. Meanwhile, the Legacy Media Ignored the Five Year Anniversary of the Seasonally Adjusted First-time Unemployment Claims Streak.What's the big deal? It's just 262 consecutive weeks where the seasonally adjusted first time claims have been reported under 300,000 claims. It's only been 152 consecutive weeks where we had the seasonally adjusted continuing claims reported below 2 million claims. The insured Unemployment rate was the lowest for the first week of March - EVER. The article "Jobless Claims Remain Under 300,000 in Face of Wuhan Virus" includes links to articles regarding expected future surges in weekly claims from multiple states in the country.
(March 20) The Existing Home Sales Market is an economic multiplier, much like the new home construction market and the new home sales market. The February Existing Home Sales Report from the REALTORS included information regarding a record February average Sales Price, the best February monthly existing home sales recorded since February 2007, and improving inventory. "February Existing Homes: Can't Be Held Down" explains how this was a remarkable report. It, too, was mostly ignored, in favor of market volatility and the Wuhan Virus.
Speaking of the Wuhan Virus, the data continues to be collected. There appear to be some existing medications that shorten the length of the Wuhan Virus and the severity of the symptoms. This may be a short, painful, period of turmoil.
The Wuhan Virus is no longer contained to China and Europe. It is being found in more countries than I care to count. There is a great article that I posted to my Twitter timeline that incorporates some of these points and other points that I have made during the past month and a half. It is an outside source. It is well worth the read. "Evidence Over Hysteria - COVID-19"
Next week we will receive the New Home Sales data, Gross Domestic Product (Final read of fourth quarter) and some ugly first-time claims data (although possibly not as bad as is being projected.) Some people who are unemployed will file after one week of being unemployed. Some people will not be looking for work, and this may make them ineligible for unemployment benefits. Some people will be part-time workers who are ineligible for unemployment insurance. Some people may have been working two jobs and may still have one job. Stay Calm.
It's the Economy.
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