Bearish Labour & Return to Office

Macro Perspectives: Mon 13 Sep 2021

Thursday’s speech by the President laid out a plan to raise the vaccination level.

As we discussed, vaccine mandates for the government and the healthcare industry pose a threat to the employment situation. There already is a labor shortage, driven by federal income subsidies and debt moratoriums, now we may see the labor shortage exacerbated by firings and walkouts.

With that, on the private employer front, for employers that would be forced to comply with either vaccine or testing mandates, we may find the return to office plans get pushed out even farther. That probably doesn't bode well for the office stocks. Let's take a look at a couple of those…

First, here's SL Green Realty Corp. (SLG). This is a REIT that primarily invests in office buildings and shopping centers in New York City. As you can see in the chart, as of June, this stock had retraced more than 80% of the losses from the pandemic-induced restrictions - it closed Friday down ~3.3%.

Next is Boston Properties (BXP). This REIT invests in office buildings in big U.S. markets like Boston, New York, San Francisco, Los Angeles and DC. The stock also had retraced over 80% of the pandemic losses - it closed Friday down ~3%.

What was UP, in a down market? Maybe one of the favorite "work from home" stocks: Zoom (ZM) - up ~2%. Perhaps a dip to buy in this chart...