De Groote Financial Group February 3, 2021 No Comments

Week Ending September 18, 2020

US ISM Manufacturing… The September reading of the Purchasing Managers Index came in at 55.40.

What it means – PMI is up 15.9% yoy. China came in at 51.5. Europe as a whole is seeing some growth but Germany, the UK and Japan are all struggling. Policy matters and the PMI is just one of many measures showing that our economy is re-emerging faster from the self-inflicted destruction caused by the virus and despite many state leaders being fearful of opening the economy almost 8 months after shutting down. This is an amazing feat. Well done America. Your rugged individualism and love of liberty will see you through this.

Retail Sales… Retail sales rose 1.9% m/m.

What does it mean – Yet another indicator showing our economy improved in September across almost all sectors. Believe it or not the only sector showing a decline was Electronics and Appliances. Expect that to change as Apple gears up to launch its new phone. What is even more amazing is that we are nearly at an all time high in the middle of a lockdown and still struggling with several states not wanting to open.

Unemployment… Airlines and their employees are bearing the brunt of politics.

What it means – Airlines and the travel industry are reeling from Nancy Pelosi’s lack of concern for the industry or employees. There is a deal on the table to help the airline industry protect those jobs. We are now seeing the spike we discussed last week. This is real and it matters. This will trickle down to many different industries that support the airlines and travel industries. While airlines employees are being laid off as the stimulus has run out, government continues to pay government employees and government without concern to the cost or the quality of the product.

Wages… According to the Bureau of Labor Statistics, wages are up year over year 5.57% ending in September and .36% for the month.

What it means – Maybe it is a trickle-down world…Low corporate taxes have brought industry back to the US and we continue to see demand for skilled labor as well as unskilled. If we actually do open up, you can expect higher wages and more productivity.

COVID… Europe, particularly France is seeing a massive surge in new cases.

What it means – Europe was the standard bearer for how to handle COVID. Yet, there have been several countries that went against EU protocol and have fared better. While one person dying from this disease is one too many, many of us will return to normal, while others will continue to shelter in place, and we will continue to hear about masks, vaccines, and therapies and a heck of a lot of noise from the media. We are all on the same side and we need more tolerance and less of an all or nothing attitude. Remember what is good for Westlake village might not be right for New York City.

Have a wonderful week,

Doug De Groote, CFP®, MBA, CTC
Managing Director

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.
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