It's arrived

MARKETS

• Markets: No need to check Robinhood today—the stock market is closed for the holiday weekend. The three major indexes all posted strong gains over the short week.
• Economy: How low can they go? We’re talking about the average rate on the 30-year fixed-rate mortgage, of course, which hit its lowest level ever this week.

JOBS

June Jobs Report Offers Hope With a Side of Caution

We needed some good news going into the long weekend, and the Bureau of Labor Statistics said, "I gotchu." It reported that the U.S. added a meaty 4.8 million jobs in June, dropping the unemployment rate to 11.1%.

Those jobs returned to industries that took the hardest hits—more than 40% (2.1 million jobs) were in leisure and hospitality⁠. Food services added about 1.5 million.

Like reading a Rorschach test

Don't take that unemployment rate at face value. May's 13.3% unemployment was artificially low because the Labor Dept. has been misclassifying some workers as employed. For June, that error (though smaller) could mean unemployment is closer to 12.1%.

And there are other measures of the labor market that paint a different picture. Indeed Chief Economist Jed Kolko says "core unemployment," which leaves out temporary layoffs, accelerated to 5.9% in June from 5% in May. That could indicate deeper economic pain than what appears in the BLS report.

Plus, there's a timing issue

Unlike your eighth grade science fair project, the Labor Department doesn’t throw these surveys together the night before. The June jobs report is based on data from the week of June 12...the week before we started writing about COVID-19 coming back with a fury.

Cases are rising in 40 U.S. states, and as businesses re-close or delay reopening, some workers are getting laid off or furloughed again.

Long road ahead

Overall, the June report is a positive sign. 7.3 million jobs added over two months puts a dent in the 20.5 million lost in April, but 19.3 million are still collecting unemployment benefits. SF Fed President Mary Daly said unemployment will probably stay over 10% for the remainder of 2020.

Big picture: "The pandemic pushed us into a very deep economic hole," Moody's Chief Economist Mark Zandi told the WaPo. "We can certainly fall back."

Curious what goes in an unemployment report? We've got a guide for that.

INSURANCE

Lemonade Hitting the Public Market Like

Lemonade, the SoftBank-backed "insurtech" startup, traded publicly for the first time yesterday. Either beginner's luck or it's onto something, because shares jumped 139%, pushing the company to a market value of $3 billion.

• Like any good startup founder who just became insanely rich, Lemonade CEO Daniel Schreiber played it cool. "We've got many years ahead of us...I'm not going to pay any attention to short-term fluctuations—even exciting ones like this morning," he told the FT.

What's got investors so excited?

1. Innovation: or lack thereof in the insurance industry. "No one has really emerged at scale in this industry for a really long time—not since the 1950s," consultant Hugh Tallents told the FT.
2. Millennials: In addition to a hot pink colorway, Lemonade has a business model it hopes will appeal to a younger demographic. It takes a fee on each policy it sells, then donates to charity any reserves not used for claims.

+ More about Lemonade: If you want a deeper look into the insurtech industry, check out CEO Daniel Schreiber's interview on our podcast Business Casual.

EVENTS

Fireworks Go Direct-to-Consumer

For the fireworks industry, it is the best of times, it is the worst of times.

Start with the bad: far fewer fireworks shows this July 4. Cities from Boston to SF have canceled big IRL celebrations because they know it'll draw a crowd, and crowd = not what you want to promote during a pandemic.

• Firework sales are hyper-seasonal—think of what canceling Halloween would do to the plastic pumpkin seed scooper industry.
• That's currently happening to fireworks display companies. COVID-19 will wipe out more than 80% of their income, says the American Pyrotechnics Association (APA).

But people are still buying fireworks. It's just the folks who don't really know what they're doing. With major celebrations off the calendar, backyard consumer firework sales are expected to hit an all-time high, per the APA. And that's coming off a year when they already did $1 billion in revenue for the first time.

Looking ahead...more backyard fireworks could lead to more injuries, so be safe out there and always discharge your fireworks from a hard, flat, and level surface.

ENTERTAINMENT

What Are You Watching This Weekend? Oh, Right.

For the first time ever today, you'll be able to see Hamilton without a) paying an obscene amount of money or b) sneaking into the Richard Rodgers Theatre saying you are George Washington's dad's ghost and need a quick word with your son.

Lin-Manuel Miranda's epic musical has officially arrived on Disney+, the biggest debut on the platform since The Mandalorian's 15 minutes of Baby Yoda fame.

• Note: Hamilton's not a made-for-TV movie, but rather a recording of the show from a pair of live performances in 2016.

It wasn't supposed to be this way. Disney had planned to release Hamilton in theaters in 2021. But yada yada yada, the company decided to push up the launch date "in light of the extraordinary challenges facing our world," per Executive Chairman Bob Iger.

Bottom line: Despite potential box office revenue going poof, Disney hopes the Hamilton buzz drives more subscriptions to its new Disney+ streaming platform, which costs $6.99/month.

WHAT ELSE IS BREWING

• Texas has mandated face masks in most of the state.
• Tesla topped delivery estimates for Q2 a day after it became the most valuable automaker in the world. It wants to stay at the top—shares jumped nearly 8%.
• Ghislaine Maxwell, the ex-girlfriend of convicted pedophile Jeffrey Epstein, was arrested by the FBI. She's accused of helping his sex-trafficking operation.
• COVID-19 has put an impossible burden on working parents, author Deb Perelman writes in the NYT.
• Walmart is partnering with Tribeca Enterprises to turn 160 of its store parking lots into drive-in movie theaters this summer.
• Boeing is planning to end production of the 747, aka the Queen of the Skies, in about two years, reports Bloomberg. It’s a sad day for plane lovers.

FRIDAY PUZZLE

What English word can be formed from all these letters: PNLLEEEESSSSS?

FRIDAY PUZZLE ANSWER