Don’t Call it a Comeback
In reference to the Cass Shipping Index for June, Cass Says “Don’t Call it a Comeback.“
The Cass Freight Index showed sequential volume improvement again in June, although freight volumes still remain well below year-ago levels and also below pre-pandemic levels. We were thinking the June rebound would have been stronger, based on what we’re hearing on the trucking side and what we’ve been seeing with respect to rail traffic and with the ISM Index now back >50.
Cass Freight Index vs Prior Years
As a measure of economic activity, Cass Freight Index shipment volumes dropped 17.8% vs year-ago levels, better than last month’s -23.6% y/y change, but not good by any absolute measure. The index reading from May nudged up 3.5%, an acceleration from the 1.6% sequential improvement seen from April’s low to May. We believe the stock market run over the last few months has, therefore, largely been a function of very low interest rates (higher valuation multiples) and not a function of a better economy (higher earnings).
Total Freight Expenditures
Total freight expenditures have taken a drastic hit.
No Significant Recovery
Cass has numerous other charts that all say the same thing: There is no significant recovery.
All Continued Unemployment Claims Top 32 Million Again
Given that All Continued Unemployment Claims Top 32 Million Again there is no reason to believe things have improved much.
Additional Key Ideas
- American Airlines is in Deep Financial Stress and will shed 16,000 or more jobs.
- United Warns It May Cut 36,000 Employees
- A Surge in Small Business Bankruptcies is Underway
- That Fewer People Pay Their Rent on Time in July suggests more people are struggling.
- Phone Data Shows the Retail Recovery Has Stalled in Covid Hotspots
- Patients Stranded in Emergency Rooms as Hospitals Fill Up
Where to From Here?
The above 6 headline items tell the story.
Mish
The Only thing that has Recovered is the Stock Markets and it doesn’t take a Genius to know why . . . America is living in a Myth which will disappear after the election when it really becomes clear just how bad things really are . . . Get ready for some real heavy B.S. . . .
Note also: initial unemployment claims are actually rising again. The officially reported decline this week was based on a “seasonal adjustment” that makes zero sense in the current situation. The non-adjusted claims were a cool 800K higher!
Large companies needed to take more time to assess product mix and human resources before swinging the axe. Larger companies also needed to give employees enough time to consider early retirement packages. Companies who took the PPP won’t want to take a second round of it unless there is a business case for keeping underapplied employees. So the end of PPP is going to be a line in the sand for big corporations.
Rail concurs:
WASHINGTON, D.C. – July 15, 2020 – The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending July 11, 2020.
For this week, total U.S. weekly rail traffic was 449,092 carloads and intermodal units, down 14.9 percent compared with the same week last year.
Total carloads for the week ending July 11 were 201,703 carloads, down 22.7 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 247,389 containers and trailers, down 7.4 percent compared to 2019.
None of the 10 carload commodity groups posted an increase compared with the same week in 2019.
Just read UBS billionaire clients loaded up on stock at the March bottom and are now thinking gains are minimal from here and moving money into private equity and real estate.
The recovery keeps getting farther and farther off in the distance.
If this year prints -6% GDP that’s 3.2% growth for 2 years to get back to zero. 2023.
it the print is -10% that’s 3.8% for three years to get back to zero. 2024.
Or in other words higher growth than we have had in a decade to get back to zero in a few years after the biggest debt bing in history. Very bullish. Or inflationary. I think they are the same.
Some of Trump’s most ardent supporters are making strange claims of the merits of eating human flesh. https://www.thenation.com/article/politics/cannibalism-cure-limbaugh-coronavirus/
Rush has always been unhinged but his staying power with his demographic (learning impaired) has been impressive. This is pretty preposterous but at least he’s not Alex Jones!
Quit measuring or have the bad data routed directly to the Whitewashing House…problem solved!
Is this a cause of supply chain issues or coincidental? I was at our local Wincos yesterday and they had no beef. Empty coolers. Weird.
I cannot get pressure treated lumber… was gonna build a deck at the new house, but 4X4 .60 direct burial posts are nowhere to be found. The company that makes the chemical for wolmanized lumber is behind in production.
I’ve had the same issue for weeks. Pressure treated deck boards have been gone for weeks.
Local lumber yard had them in stock, 40% more than home depot/Menards…they said next week price goes up another 10%.
OMG clutch your pearls people dont have copious amounts of extra money to keep buying and buying more stuff!