Just Keep Moving: Mobility Data Shows “The Real Economy”
Over the course of 9+ years, my fellow bandmates and I saw the country through the window of a 15-passenger van.
From coast to coast, city to city, college town to college town, venue to venue – we racked up hundreds of thousands of miles behind the wheel in more than half the states in this country, often playing 100+ shows per year.
In a million years, I’d never trade that experience for anything. We formed friendships with fantastic people all over the country – many of which last to this day – and despite our best efforts to the contrary, we figured out a thing or two about running a business.
But man, sometimes the travel was just… exhausting.
I’m not the only one to think so, of course. Back in 1999, one of my all-time favorite bands – Supergrass – wrote a face-meltingly fantastic song about the monotonous part of touring called Moving.
The first verse pretty well sums it up:
Moving, just keep moving
‘Till I don’t know what’s sane
I’ve been moving so long
The days all feel the same…
Wake up. Drive. Load in. Wait. Sound check. Eat (maybe). Play show. Talk to folks. Load out. Drive. Sleep.
Do that enough times in a row and one day just bleeds into another.
But I probably don’t have to tell you that, because we’ve all been experiencing the same kind of thing in quarantine for the past few months.
When we finally began to emerge from our cocoons at the beginning of May, most of us had the same kinds of desires –to go out to eat, to get some retail therapy, and to a slightly lower extent – to get back to work.
As such, it stands to reason that if we want to see how “The Real Economy” – meaning the flow of goods and services – is doing, we should look at where we’re going.
To address that, Apple and Google have both released aggregated location data recently. And somewhat interestingly, they tell two different stories.
The Best of Times and the Worst of Times
Apple’s data shows a deep decline during lockdowns, followed by an incredibly strong recovery, with routing requests (asking the phone for directions) up 29% compared to pre-COVID levels.
Source: Apple, Seawolf Research
While that certainly paints a positive picture, we have discussed in previous issues that driving hasn’t increased – or else both diesel and gasoline consumption would have increased.
Moreover, when I chart out Google mobility data, it’s easy to see that retail (-15%), transit stations (-28%) and work (-36%) destinations are all down sizably year-on-year, while parks (+60%) and residential (+9%) destinations are the only ones to show increases.
Source: Google, Seawolf Research
The likely reason for the discrepancy is two-fold. First, Google simply controls a larger share of the market, so it has a more robust dataset.
But also, Android phones have a much broader price range and a lower entry-level price point, so they dominate in lower income areas and emerging economies.
So Apple data is basically telling us that comparatively wealthier people are more active than before the COVID outbreaks – which makes some sense, as there was definitely pent-up demand for a semblance of normalcy.
But there are way fewer rich people in this country than there are people living in poverty – by about a 3-to-1 ratio – and “The Real Economy” is the sum total of all their activity.
Well, the average of the three negative changes in the Google mobility data is -26.4%, and according to GasBuddy, gasoline demand is down 18.2@ on the year. As I pointed out on Twitter, with park destinations up 60% in the same timeframe, the Google data seems like a pretty reasonable proxy for how the economy is doing.
Needless to say, -18.2% should probably not classify as “good.”
Moreover, with retail traffic still down significantly and COVID cases on the rise again in several states, there’s a chance we could see lockdowns once again.
That brings our old friend ProShares Long Online/Short Stores ETF (NYSEArca:CLIX) back into focus as citizens of those states will become more levered to e-commerce shops like Amazon (NYSE: AMZN) and less levered to brick-and-mortar stores over the coming weeks.
Because markets are getting spooked occasionally and the extra $600 of individual stimulus expires on July 31, we might get a chance to pick up a second ¼ tranche below the $70 level. As such, setting a limit order at around $69 per share seems reasonable.
But in the meantime, if you’re one of the folks actually driving all this driving data, be safe out there!
All the best,
Matt Warder
