Jan 31, 2017

Big in Business: Fear returns to Wall Street

Richard Drew / AP

Unpredictability spooks markets: The VIX—Wall Street's go to measure of future volatility—jumped 12% on Monday, the largest one-day increase since early November. Low volatility was one of the more dubious features of the 2017 stock market. The Trump administration may have business-friendly intentions, but yesterday's declines show the downside of unpredictability.

Aetna report earnings before the bell this morning: The health insurer's outlook may provide a hint of the sector's strategy going forward as the Trump administration pulls efforts to sign up Obamacare enrollees.

Signs of rising inflation? Released at 8:30, the Employment Cost Index is the most comprehensive gauge of rising compensation available. If we see a big spike in the Q4 2016 reading, the market will take that as evidence that the Fed will raise rates more aggressively this year.

Go deeper

HBCUs are missing from the discussion on venture capital's diversity

Illustration: Eniola Odetunde/Axios

Venture capital is beginning a belated conversation about its dearth of black investors and support of black founders, but hasn't yet turned its attention to the trivial participation of historically black colleges and universities (HBCUs) as limited partners in funds.

Why it matters: This increases educational and economic inequality, as the vast majority of VC profits go to limited partners.

Unemployment rate falls to 13.3% in May

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. unemployment rate fell to 13.3% in May, with 2.5 million jobs gained, the government said on Friday.

Why it matters: The far better-than-expected numbers show a surprising improvement in the job market, which has been devastated by the coronavirus pandemic.

The difficulty of calculating the real unemployment rate

Data: U.S. Department of Labor; Note: Initial traditional state claims from the weeks of May 23 and 30, continuing traditional claims from May 23. Initial PUA claims from May 16, 23, and 30, continuing PUA and other programs from May 16; Chart: Andrew Witherspoon/Axios

The shocking May jobs report — with a decline in the unemployment rate to 13.3% and more than 2 million jobs added — destroyed expectations of a much worse economic picture.

Why it matters: Traditional economic reports have failed to keep up with the devastation of the coronavirus pandemic and have made it nearly impossible for researchers to determine the state of the U.S. labor market or the economy.