Camelot Portfolios Talking Points

Unemployment Rate continues to Improve

The US unemployment rate at the end of December was 4.1 percent and was unchanged from the previous month. Over the year, the unemployment rate dropped .7 percent from the start of the year; this decline in unemployment added 926,000 jobs to the labor force (Bureau of Labor Statistics). While the unemployment rate improved, the labor force participation rate remained bounded between 62.7 and 63.1 percent (Bureau of Labor Statistics).

Some notable changes in unemployment by major worker groups are teenagers, black and Hispanic workers. Teenagers unemployment declined to 13.6 percent, Black workers declined to 6.8 percent, and Hispanic workers declined to 4.9 percent (Bureau of Labor Statistics).

Looking into employment by industry, manufacturing, education and health, and professional/business services increased over the past year. Manufacturing added 196,000 jobs, Education and health added 438,000 jobs, and professional/business services added 527,000 jobs (Bureau of Labor Statistics).

There were a couple of industries which have seen a decline in jobs. Retail trade decreased by 66,500 jobs, information declined by 40,000, and utilities decreased by 4,400 jobs (Bureau of Labor Statistics).

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2017 Market Volatility

Looking back at 2017, the US equity market was at historically low volatility. The 52 week range for the VIX, which is the volatility measure for the S&P 500, was between 9.14 and 16.04 (Yahoo Finance). To put this in perspective, there were only 4 days in 2017 with a daily decline of greater than 1 percent (Yahoo Finance). The largest single decline happened on May 17, 2017. On that day, the news that likely contributed to this decline was information surrounding President Trump sharing information with Russia (Zachs Equity Research).

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On average, VIX was between 10.5 and 11 with 52 occurrences at the market close in 2017 (Yahoo Finance). 95 percent of VIX daily closings were between 10 and 13, and there were 18 occurrences when VIX was above 13.

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Compiled by the Camelot Portfolios Investment Committee

Darren Munn, CFA, Chief Investment Officer

Paul Hoffmeister, Chief Economist

Eric Kartman, Research Analyst

Drew Steinman, CPA, Trader/Research

Zach Hartenburg, Trader/Analyst

Frank Echelmeyer, MBA, CKA®, Advisor Consultant

-for Broker/Dealer and RIA use only-

 

References

Bureau of Labor Statistics. "Employment Situation Summary." 5 January 2018. bls.gov. 2018.

Yahoo Finance. "CBOE Volatility Index." January 2018. Yahoo Finance. 2018.

Zachs Equity Research. "Stock Market News for May 17, 2017." 17 2017. May. 2018.

 

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Any charts, graphs, or visual aids presented herein are intended to demonstrate concepts more fully discussed in the text of this brochure, and which cannot be fully explained without the assistance of a professional from Camelot Portfolios LLC.  Readers should not in any way interpret these visual aids as a device with which to ascertain investment decisions or an investment approach.  Only your professional adviser should interpret this information.  A581