3 keys to understanding the weirdest economy ever.
1) The income/spending divergence.
April was the WORST month ever for retail spending and the BEST month ever for personal income growth. That makes no sense, and yet it's entirely true.
2) The home/away divergence.
Retail is in the toilet, but the at-home economy is doing fine. New-home sales are holding up. So are mortgage apps, grocery sales, home improvement spending, and pet stuff.
2b) The software/hardware divergence
Software has served as a kind of commercial vaccine for both millions of remote workers and thousands of online firms. A handful of tech co's—Google, Microsoft, Apple, etc—have driven most of the market’s gains this year.
3) The real economy/plague economy divergence
There are a lot of investors who believe (perhaps wrongly!) that the "real economy" is fine and ready to roar if we just get over the virus. And they're treating every cheery vaccine headline like a corporate-equity stimulus.
You can follow @DKThomp.
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