It’s easy to mock the rally in global equities – it really is.
After all, the world is barely two months removed from the most stunning economic collapse in a century, and it was catalyzed by the terrifying prospect of a deadly pandemic.
While it’s fair to mock blind faith in a stock surge catalyzed in no small part by monetary policy intervention on a heretofore unseen scale, it’s important to note that things are normalizing – albeit gradually.
The chart above is derived from OpenTable’s data on year-over-year seated diners at restaurants on the company’s network across all channels, from online reservations, phone reservations, and walk-ins. The comparisons are from the same day of the week in the previous year.
Some of what you see in Germany and Australia is likely pent-up demand for human contact and the desire to feel something “normal”, but these are the kinds of data points that help to embolden whatever carbon-based lifeforms are participating in the equity rally (and you should note that the participation of humans is lackluster by most accounts).
A similar chart for US states shows similar trends.
Reopenings are proceeding apace, with the caveat that the protests taking place nationwide could derail things if they persist or, more to the point, if they turn violent again, triggering (figuratively, one hopes) a crackdown by the White House.
Other high-frequency data paint a similar, if less robust, picture of economic activity. Passenger traffic is picking up slowly for airlines, for example.
The TSA numbers are still pretty dour, and you should expect the recovery to be slower there than in other hard-hit businesses – after all, it takes more planning, more money and, now, a higher propensity for risk taking, to get on a plane than it does to “chance” a trip to the local diner.
And speaking of your local diner, Homebase data (which compares a given day to the median for that day of the week for the period January 4 to January 31), shows the volume of hours worked by employees trending higher.
The Homebase data set is well worth consulting, and I’ve cited it habitually over the past several months.
The company’s technology (it’s basically just a scheduling and time tracking tool) is used by more than 100,000 local businesses. Homebase notes that its customers in the US “primarily consist of restaurant, food & beverage, retail and services and are largely individually owned/operator-managed businesses”.
Those are precisely the sectors and types of businesses we should be focused on when it comes to assessing the viability of the recovery.
“but these are the kinds of data points that help to embolden whatever carbon-based lifeforms are participating in the equity rally (and you should note that the participation of humans is lackluster by most accounts).”
Well put, sir!