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REPLAY | DE | Monthly | Employment Conference Call | DE | Monthly | Employment Conference Call | Labor Market, Economy, Fed Amid COVID-19 Increased Risk – 09/03/21
Both Hiring and Not Hiring; Still “Army of Unemployed?”
- Labor Market in Late Summer with COVID Increased Risks—Strong? Weak? Mixed?
- Jobs (Nonfarm Payrolls); Unemployment and the Unemployment Rate (Household Survey); Wage Inflation
- Special Factors—Seasonal; COVID-19 Resurgence; Hurricanes Both Hiring and Not Hiring; Still “Army of Unemployed?”
- DE Basic Prospect
“Boomlet and Expansion” (75% Odds)
- 2021-23—Growth, Inflation, Unemployment, Profits (S&P 500 Op. EPS)
- Themes—1) Sustained Expansion; 2) Higher Inflation But Not Acceleration; 3) Sticky-High Unemployment; 4) Fed Emphasis “Full Employment” vs. “Inflation”; 5) Macro Fundamentals Positive for Expansion
- Risks—COVID-19; Inflation Acceleration—Too Much of A Good Thing (10% to 15%); Underperformance (5%); Recession (5%)
- Fed and Monetary
Policy—Breaking Historical Rules
- Tapering—On the Way; Powell Commentary
- Funds Rate Hike Timing—Uncertain
- Main Goal—Full Employment Not Price Inflation
- Inflation “Transitory?”
- Fiscal Stimulus—Unprecedented
Even for 1930s and W.W. II
- $5.9 Trillion in 2020-21 and $600 Billion Traditional Infrastructure on Tap—A Spend-and-Tax Future?
- $6.5 Trillion Biggest Stimulus Ever Including W.W. II
- $3.5 Billion Biden Budget—Spend-and-Tax
- Earnings and
Equity Market Valuations
- S&P 500 Fair Value and Ranges—4600+
- Downside on Consensus Earnings but Above 4300
- Upside—Looking to 2023—5200 plus; For 2022, 5000?
- Note—Midterm Elections, Federal Budget, and “Human Infrastructure” Potential Negatives for a Deficit and Debt-Crisis?