TRG Fast Facts

By TRG Advisors on August 17, 2023

Weekly data-driven insights on the markets and economy

1. Slip and Slide

Stocks slid for the second week in a row last week amid mixed inflation data. For example, core consumer prices fell slightly to 4.7% in July from 4.9% in June,[i] while producer prices rose 0.3% month-over-month in July versus 0% in June.[ii] The S&P 500 slid -0.27%, slightly reducing its year-to-date (ytd) return to 17.43%, while the tech-heavy Nasdaq Composite slipped a more significant -1.87%. It remains up 31.04% ytd.[iii]

2. Down-home

Researchers at the San Francisco Federal Reserve predict that shelter inflation will continue to slow through late 2024 and may even turn negative by mid-2024. However, the range of outcomes suggested by its analysis of house prices and asking rents is wide — its baseline model is predicting that year-over-year (y/y) shelter inflation could be anywhere from about -9% to about 2% y/y by late 2024.[iv]

3. Losing the Will

The percentage of banks indicating an increased willingness to loan to consumers has fallen sharply — to   -21.8% as of the end of July versus 24.2% two years ago and 5.2% one year ago — as credit conditions tighten amid restrictive Fed policy.[v]

4. The Mother Load

As of June 2023, the 12-month moving average labor force participation rate for prime-age women with a child under 5 was 69.3%, 2% above its February 2020 level of 67.3%. This is the highest level since December 1982, when data first became available.[vi]

5. Heartening News

Novo Nordisk reported results of a trial showing that its obesity drug Wegovy reduced major adverse cardiovascular events by 20% over a period of up to five years.[vii] This paves the way for better insurance coverage and greater demand for obesity drugs. Novo’s stock rose 17% after the news was announced.[viii]

6. Bargaining Chips

The U.S. semiconductor chip industry will face an estimated 67,000-person shortage of technicians, computer scientists and engineers by 2030. Companies, in turn, are ramping up incentives — e.g., Purdue University recently introduced an eight-week course that includes a $10,000 stipend for students funded by companies. Recruitment efforts may be working: In May, applications for semiconductor company jobs on Handshake, a job platform for recent graduates, were up 79% y/y.[ix]

7. Diamonds in the Rough

Diamond prices have fallen -12.4% ytd and -16.6% y/y.[x] One large driver has been a drop in wedding proposals: The average length of a relationship before engagement is two or more years,[xi] and COVID-19 disrupted the dating scene. For example, 63% of “single-and-looking” adults indicated that dating got harder during the pandemic.[xii]

8. Big Delivery

An average full-time driver at the United Parcel Service (UPS) will make about $170,000 annually in pay and benefits by the end of a five-year contract recently negotiated between the company and its union workers. Part-timers already at UPS will make at least $25.75 per hour and receive full health care and pension benefits.[xiii] Interest in “UPS jobs” via Google searches appears to be at its highest since 2004.[xiv]

9. Still Waiting

If restaurants still seem stretched to you, there’s good reason: After growing modestly during the decade prior to the pandemic, from around $5,700 to $6,500, the dollar amount of sales per employee in the food services industry hit an all-time high of $7,700 in July 2021 and is now about $7,300. This reflects higher sales and lower employment in the industry, which is just now returning to pre-pandemic levels.[xv]

10. Bigger Fish to Fry

John Ols of Laytonsville, Maryland, caught a 640.5-pound blue marlin Saturday, which won him a world-record $6.2 million from a $10.5 million purse. This catch was more than 100 pounds heavier than last year’s winner in the same competition, the White Marlin Open.[xvi] Female blue marlins can weigh up to about 2,000 pounds.[xvii]

[i] U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average [CPILFESL], retrieved from FRED, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/CPILFESL. Accessed August 15, 2023.

[ii] U.S. Bureau of Labor Statistics, “Producer Price Index News Release Summary,” August 11, 2023, https://www.bls.gov/news.release/ppi.nr0.htm. Accessed August 15, 2023.

[iii] FactSet total returns as of August 11, 2023.

[iv] Kmetz, Augustus, Schuyler Louie and John Mondragon, “Where Is Shelter Inflation Headed?” Federal Reserve Bank of San Francisco, FRBSF Economic Letter, August 7, 2023, https://www.frbsf.org/economic-research/publications/economic-letter/2023/august/where-is-shelter-inflation-headed/. Accessed August 15, 2023.

[v] Board of Governors of the Federal Reserve System (US), Net Percentage of Domestic Banks Reporting Increased Willingness to Make Consumer Installment Loans [DRIWCIL], retrieved from FRED, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/DRIWCIL. Accessed August 15, 2023.

[vi] Henry, Erin and John O’Trakoun, “A Mother’s Work Is Never Done?” The Federal Reserve Bank of Richmond, Macro Minute, August 8, 2023, https://www.richmondfed.org/research/national_economy/macro_minute/2023/mm_08_08_23. Accessed August 14, 2023.

[vii] Novo Nordisk, Company Announcement, August 8, 2023, https://www.novonordisk.com/news-and-media/news-and-ir-materials/news-details.html?id=166301. Accessed August 10, 2023.

[viii] Miao, Hannah, “Novo Nordisk Stock Pops After Wegovy Study Suggests Heart-Health Benefit; Health Insurers Slip,” The Wall Street Journal, August 8, 2023. Accessed August 12, 2023.

[ix] The Economist, “Chipping In,” August 12, 2023.

[x] Paul Ziminsky Diamond Analytics, Global Rough Diamond Price Index, as of August 12, 2023, https://www.paulzimnisky.com/roughdiamondindex. Accessed August 15, 2023.

[xi] Johnson, Chapelle, “How Soon Is Too Soon to Propose? And More Dating Advice From Experts,” The Knot, January 19, 2023, https://www.theknot.com/content/hot-topic-how-long-should-you-date-before-getting-engaged. Accessed August 15, 2023.

[xii] Brown, Anna, “Most Americans Who are ‘Single and Looking’ Say Dating Has Been Harder During the Pandemic,” Pew Research Center, April 6, 2022, https://www.pewresearch.org/short-reads/2022/04/06/most-americans-who-are-single-and-looking-say-dating-has-been-harder-during-the-pandemic/. Accessed August 15, 2023.

[xiii] UPS, Q2 2023 Earnings Presentation, August 8, 2023, https://investors.ups.com/. Accessed August 15, 2023.

[xiv] Google Trends, based on Interest Over Time, as of August 14, 2023, https://trends.google.com/trends/explore?date=all&geo=US&q=ups%20jobs&hl=en-US. Accessed August 14, 2023.

[xv] Federal Reserve Bank of St. Louis, “Sales and Employment in the Food Services Industry,” The FRED Blog, August 10, 2023, https://fredblog.stlouisfed.org/. Accessed August 13, 2023.

[xvi] Salvador, Joseph, “Angler Earns World Record $6.2 Million for Massive Blue Marlin,” Sports Illustrated, August 13, 2023, https://www.si.com/more-sports/2023/08/13/angler-world-record-million-payday-massive-blue-marlin. Accessed August 14, 2023.

[xvii] National Geographic, https://www.nationalgeographic.com/animals/fish/facts/blue-marlin. Accessed August 15, 2023.