Economic Activity Tracker - May 19, 2020 - Jack Janasiewicz, CFA Portfolio Manager and Portfolio Strategist Garrett Melson, CFA Associate ...
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Economic Activity Tracker – May 19, 2020 Jack Janasiewicz, CFA® Garrett Melson, CFA® Portfolio Manager and Portfolio Strategist Associate Portfolio Strategist Portfolio Research and Consulting Group, Natixis Investment Managers
THE ALL CLEAR
The Checklist
Issue Comment
Is the economy restarting? Slow and steady, uneven – the worst appears to be behind us.
The ability and effectiveness to social distance is creating a bifurcated restart.
Are businesses coming back on line? Easy Social Distancing is improving:
Health & Beauty, Recreation, Retail/Wholesale
Difficult Social Distancing is struggling:
Arts & Entertainment, Bars & Lounges, Lodging
Are small businesses restarting? Slowly recovering – Retail and Leisure seeing biggest improvement
Are people getting out and about? Yes – but with a preference to avoid crowds
ie: use a car vs public transportation, air travel
Are consumers spending? Winners:
Fast Food, Grocery, Home Supply Stores, Discount & Variety Stores
Losers:
Lodging, Air travel, Department Stores, Leisure, Restaurants
Source: Natixis PRCG.
2ECONOMIC ACTIVITY TRACKER
Is The Economy Restarting?
NY Fed's Real Activity In Real Time Weekly Economic Index NY Fed's Real Activity In Real Time Weekly Economic Index
(1/5/08–5/12/20) (1/5/18–5/12/20)
6 6
Scaled to 4 Quarter % Change in Real GDP
Scaled to 4 Quarter % Change in Real GDP
4 4
2 2
0 0
-2 -2
-4 -4
-6 -6
-8 -8
-10 -10
-12 -12
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20
Oxford Lockdown Index: United States Business Closure Rates
(2/1/20 - 5/19/20) (3/1/20–5/14/20)
100 100% Health & Beauty
90 90% Arts & Entertainment
Bars & Lounges
80 80% Sports & Recreation Places
Restaurants
70 70% Parking Businesses
Index Level
60 60% Retail & Wholesale Businesses
Quick Serve Food & Beverage
50 50% Lodging Places
Food & Beverage Shops
40 40% Auto Service
30 30% Pet Services
20 20%
10 10%
0 0%
2/1 2/8 2/15 2/22 2/29 3/7 3/14 3/21 3/28 4/4 4/11 4/18 4/25 5/2 5/9 5/16 3/1 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10
3 Source: Natixis PRCG, New York Federal Reserve, Oxford COVID-19 Government Response Tracker, Womply.ECONOMIC ACTIVITY TRACKER
Are Businesses Open?
Small Business Hours Worked By Hourly Employees Number of Small Businesses Open
(3/1/20–5/13/20) (3/1/20–5/14/20)
10% 20%
0% Individual States US Total
0%
-10%
-20% -20%
vs Median
vs Median
-30%
-40%
-40%
-50% -60%
-60%
-80%
-70%
-80% -100%
3/1 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 3/1 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10
Number of Small Businesses Open By Sector Business Applications
(5/1/20–5/14/20) (1/4–5/9)
100,000
20% 90,000
0% 80,000
# of Applications
70,000
-20%
vs Median
60,000
-40% Beauty & Personal Care
Food & Drink
50,000
-60% Health Care and Fitness
40,000
Leisure and Entertainment
Other 2019 2020
-80% Professional Services 30,000
Retail
Transportation 20,000
-100%
1 6 11 16 21 26 31 36 41 46 51
3/1 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10
Week of Year
Source: Natixis PRCG, US Census, https://joinhomebase.com/data/covid-19/. Small business hours worked rates compare that day vs. the median for
4 that day of the week for the period Jan 4, 2020 to Jan 31, 2020.ECONOMIC ACTIVITY TRACKER
Are People Moving Again?
TSA Total Traveler Throughput
Public Transit Usage (3/4–5/17)
(1/15/20–5/17/20) 3.0 100%
20% 2019 (LHS) 2020 (LHS) YoY % Decline (RHS)
2.5
Passengers Per Day (mlns)
0% 80%
2.0
-20%
60%
% Change
% YoY
-40% 1.5
San Francisco Chicago 40%
-60% 1.0
NYC Boston
DC Philadelphia 20%
-80% 0.5
LA Seattle
Miami Others
-100% 0.0 0%
1/15 1/29 2/12 2/26 3/11 3/25 4/8 4/22 5/6 3/4 3/11 3/18 3/25 4/1 4/8 4/15 4/22 4/29 5/6 5/13
Weekly US Product Supplied of Finished Motor Gasoline Average US City Mobility
(1/4/19–5/8/20) (3/2/20 – 5/17/20)
11,000 120%
US Birmingham
10,000 Boston Chicago
100%
'000s Barrels Per Day
Los Angeles New York City
Mobility % of Usual
9,000 Philadelphia San Francisco
80%
Seattle Washington DC
8,000
60%
7,000
40%
6,000
5,000 20%
4,000 0%
Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 3/2 3/9 3/16 3/23 3/30 4/6 4/13 4/20 4/27 5/4 5/11
Source: Natixis PRCG, TSA, www.moovit.com, EIA, Citymapper.
5ECONOMIC ACTIVITY TRACKER
What Does Reopening Look Like? Number of Businesses Open Mobility - Retail & Recreational
3/1/2020 – 5/14/2020 2/1/2020 – 5/13/2020
20% 40%
20%
0%
Colorado
0%
Alabama
% Change
% Change
-20% Colorado
Georgia
-20% Alabama
Oklahoma
Georgia
-40% Tennessee Oklahoma
Texas -40% Tennessee
Florida Texas
-60% Indiana Florida
-60%
Missouri Indiana
Missouri
South Carolina
-80% -80% South Carolina
3/1 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 2/14 2/21 2/28 3/6 3/13 3/20 3/27 4/3 4/10 4/17 4/24 5/1 5/8
Mobility – Residential Mobility – Workplace
2/1/2020 – 5/13/2020 40%
30% Colorado 2/1/2020 – 5/13/2020
Alabama
Georgia 20%
Oklahoma
20% Tennessee
Texas
0%
% Change
% Change
Florida
Colorado
Indiana -20% Alabama
10% Missouri Georgia
South Carolina Oklahoma
-40% Tennessee
Texas
0%
Florida
-60% Indiana
Missouri
South Carolina
-10% -80%
2/14 2/21 2/28 3/6 3/13 3/20 3/27 4/3 4/10 4/17 4/24 5/1 5/8 2/14 2/21 2/28 3/6 3/13 3/20 3/27 4/3 4/10 4/17 4/24 5/1 5/8
Source: Natixis PRCG, https://joinhomebase.com/data/covid-19/, https://www.google.com/covid19/mobility/
6ECONOMIC ACTIVITY TRACKER
Are Consumers Spending?
ASA Staffing Index
MBA Weekly Mortgage Purchase Applications (1/5/15 – 5/11/20)
(5/12/17 - 5/8/20)
330 110
310 105
100
290
95
270 90
Thousands
250 85
80
230
75
210 70
190 65
60
170
55
150 50
May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 1/5/2015 1/5/2016 1/5/2017 1/5/2018 1/5/2019 1/5/2020
Redbook Retail Sales Retail Sales
(5/17/08–5/15/20) (5/17/05–5/15/20)
20 10
10 5
0 0
-10
% YoY
-5
% YoY
-20 -10
Redbook Index Same Store Sales Goldman Sachs Chain Store Sales
-30 -15 Redbook Index
Redbook Department Stores Same Store Sales
Retail Sales, Inc Advanced Release
Redbook Discount Stores Same Store Sales
-40 -20
-50 -25
May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20
Source: Natixis PRCG, FactSet, Bloomberg.
7ECONOMIC ACTIVITY TRACKER
Are Consumers Spending?
US Consumer Credit/Debit Card Spending Daily Revenues
(1/20/20 – 5/12/20) (3/6/20–5/13/20)
100%
100% Grocery Retail & Services
80% Restaurants Travel & Tourism
7-Day Moving Average, % YoY
80%
60%
60%
40%
40%
YoY Variance
20% 20%
0% 0%
-20% Aggregate Spending
-20%
-40% Groceries -40%
Pharamacy
-60% Airlines -60%
-80% Hotels
-80%
Apparel
-100%
-100%
1/20 2/3 2/17 3/2 3/16 3/30 4/13 4/27 5/11
3/6 3/13 3/20 3/27 4/3 4/10 4/17 4/24 5/1 5/8
OpenTable Daily Restaurant Bookings Daily Box Office Take
(2/18/20–5/17/20) (1/1–5/17)
$80
40
$70
20 2019 2020
Individual States Median $60
% YoY in Bookings
0
$50
$ Mlns
-20
$40
-40
$30
-60
$20
-80 $10
-100 $0
2/18 2/25 3/3 3/10 3/17 3/24 3/31 4/7 4/14 4/21 4/28 5/5 5/12 2/28 3/7 3/14 3/21 3/28 4/4 4/11 4/18 4/25
Source: Natixis PRCG, https://1010data.exabel.com/covid-19/, Womply, www.opentable.com, www.boxofficemojo.com.
8ECONOMIC ACTIVITY TRACKER
Are Consumers Spending?
Consumer Spending: % Change YoY
3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17
Retail
Department Stores -67% -64% -61% -42% -47% -39% -42% -30%
Discount Stores 1% 17% 20% 62% 52% 70% 53% 51%
Grocery Stores & Supermarkets 6% 15% 14% 15% 24% 40% 25% 19%
Misc. General Merchandise -33% -25% -27% 3% 33% 4% 5% 2%
Variety Stores -1% 11% 13% 7% 27% 46% 33% 33%
Wholesale Clubs -6% 4% -5% 35% 28% 49% 23% 29%
Entertainment
Amusement Parks -85% -81% -83% -71% -87% -80% -82% -83%
Bars & Drinking Places -72% -67% 37% -57% -57% -50% -52% -44%
Commercial Sports & Athletic Fields -86% -76% -85% -74% -76% -60% -70% -60%
Fast Food Restaurants -36% -32% -31% -14% -13% 2% -3% -3%
Movie Theaters -99% -99% -99% -99% -99% -99% -99% -98%
Restaurants -65% -62% -60% -49% -48% -39% -39% -34%
Tourist Attractions -83% -73% -73% -86% -76% -51% -56% -59%
Video Games 51% 95% 102% 111% 70% 96% 81% 93%
Travel
Airlines -88% -92% -94% -89% -88% -84% -82% -79%
Cruise Lines -89% -85% -88% -79% -75% -81% -74% -65%
Lodging -77% -75% -80% -72% -72% -60% -54% -47%
Vacation Rentals -82% -80% -83% -76% -75% -71% -62% -57%
Healthcare
Drug Store and Pharmacies -9% -7% 1% -8% -5% 11% 3% 0%
Source: Natixis PRCG. https://first.facteus.com
9ECONOMIC ACTIVITY TRACKER
What Is The Market Telling Us?
Stay Home vs. Reopen Composites Reopen/Stay Home
(12/31/19 – 5/15/20) (12/31/19 – 5/15/20)
120 1 Reopen
Outperforms
100 0.9
80 0.8
Index Ratio
Index Level
60 0.7
Reopen
40 Stay Home 0.6
SPDR S&P 1500 ETF
20 0.5
Stay Home
Outperforms
0.4
0
12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020
12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020
Reopen Composite Stay Home Composite
(12/31/19 – 5/15/20) (12/31/19 – 5/15/20)
120 120
100 110
80 100
Index Level
Index Level
Low
60 90
Medium
Covid Economy
40 High 80
New Economy
20 70
0 60
12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020 12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020
Source: Natixis PRCG, FactSet.
10ECONOMIC ACTIVITY TRACKER
What Is The Market Telling Us?
Low/Stay Home
Reopen/Stay Home (12/31/19 – 5/15/20)
(12/31/19 – 5/15/20) 1 Industry
1 Industry Outperforms
0.9
Outperforms
0.9 0.8
Index Ratio
0.8 0.7
Index Ratio
0.7 0.6
Low/Stay Home
0.5 Concerts/Stay Home
0.6 Medium/Stay Home
High/Stay Home Cruise Lines/Stay Home
0.4
0.5 Airlines/Stay Home
0.3
0.4 Stay Home
0.2 Outperforms
Stay Home
0.3 Outperforms 12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020
12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020
Medium/Stay Home High/Stay Home
(12/31/19 – 5/15/20) (12/31/19 – 5/15/20)
1.1 Industry 1.1 Industry
Outperforms Outperforms
1 1
0.9 0.9
Index Ratio
Index Ratio
0.8 0.8
Autos/Stay Home
0.7 0.7
Building/Stay Home
0.6 Oil/Stay Home 0.6 Comm. RE/Stay Home
Casinos/Stay Home Restaurants/Stay Home
0.5 0.5
Hotels & Bking/Stay Home
0.4 Theme Parks/Stay Home 0.4 Retail/Stay Home
Stay Home Stay Home
0.3 Outperforms 0.3 Outperforms
12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020 12/31/2019 1/31/2020 2/29/2020 3/31/2020 4/30/2020
Source: Natixis PRCG, FactSet.
11ECONOMIC ACTIVITY TRACKER
Thematic Basket Definitions
Tier 1 Tier 2 Tier 3 (# of stocks)
• Tier 1 – Equal weighted composites reflecting companies that
Autos (36)
will benefit from the respective economic environment.
Building (67)
Commercial Real Estate (29)
• Tier 2 - Equal weighted composites capturing relative ease to
6ft - High implement social distancing measures.
Restaurants (6)
Hotels and Online Bookings (10) • Tier 3 – Equal weighted portfolios of a basket of companies
within specific sectors that have varying abilities to implement
Reopen
Retail Department Stores (84)
respective social distancing measures.
Oil (60)
6ft – Medium Casinos (10) • 6ft - High – high level of ease to implement social distancing
Theme Parks (3)
measures.
Concerts and Large Events (3) • 6ft - Medium – moderate level of ease to implement social
6ft- Low Cruise Lines (3) distancing measures.
Airlines (10)
• 6ft - Low – difficult level of ease to implement social distancing
Alcohol and Takeout (19) measures.
Stay Home
Covid-19 Economy Groceries (49)
• Covid-19 Economy – businesses that we expect to do well
Home Entertainment (17)
assuming the virus continues to lingers.
Healthcare (164)
Internet Technology and • New Economy – businesses that we expect to do well in the
New Economy Communications (130) post Covid-19 world.
Online Shopping (3)
12 Source: Natixis PRCGDisclosure
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13Disclosure
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14Disclosure
This presentation is provided for informational purposes only and should not be construed as investment advice. References to specific securities or industries should not be considered a
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