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A Bird's Eye View Blog

Fireside Charts 1.23.19

by : BCM Investment Team | POSTED: Jan23, 2019 | CATEGORY: Equity, Economics, Market Highlights, Fireside Charts

 

As the government shutdown stretches into Day 33 and roughly 800,000 federal employees are poised to miss their second paycheck, the shutdown's impact on the GDP growth continues to worsen. Have you been affected by the shutdown? Is the Fed's forecast for 2% consumer inflation too high? Industrial production was surprisingly strong in December. Overseas, exports are expected to slow in China and we check in on Japan's monetary policy.

 

1. With the U.S. Government being the largest U.S. employer (Think Post office, 4 branches of the military, TSA and IRS for starters), the partial shutdown by itself will have unintended consequences!

 

 1.23 chart 5

Source: Scotiabank Economics, as of 1/22/19

 

 

2. For those who still believe the U.S. is an island and that all the global news will have no effect on the S&P 500's earnings...

 

1.23 chart 15

Source: Factset, as of 1/23/19

 

 

3. Evidence that the defensives did not act so defensive this go around...

 

 1.23 chart 7

Source: WSJ Daily Shot, as of 1/18/19

 

 

4. The 10-year UST yield seems to be rallying of 2.56%.

 

 1.23 chart 1

Source: Thechartstore.com, as of 1/17/19 

 

  

5. Lower oil prices are driving off new drilling which should put a serious dent in U.S. oil production growth... 

 

1.23 chart 2

Source: Thechartstore.com, as of 1/18/19

 

 

6. We certainly do not expect the FED to raise rates further based on the current inflation metrics...

 

 1.23 chart 8

Source: BEA as of 1/23/19

 

 

7. If anything, "blame" should be shared by the FED and the Trade War.

 

1.23 chart 14

Source: International Monetary Fund, as of 1/23/19

 

 

8. We will take good news from any corner!

 

1.23 chart 3

Source: WSJ Daily Shot, as of 1/22/19

 

 

9. Yet one of these needs an adjustment...

 

 1.23 chart 4

Source: Pantheon, as of 1/22/19

 

 

  

10. China's slowing economy continues to weigh on the global GDP forecasts...

 

 1.23 chart 6-1

Source: WSJ Daily Shot, as of 1/18/19

 

 

11. Even with a "tremendous breakthrough and resolution", has the damage already been done?

 

 1.23 chart 12

Source: Bloomberg, as of 1/16/19

 

 

12. This is a massive sea-change...

 

1.23 chart 13-1

Source: Statista, as of 1/23/19

 

 

13. Japan is somewhat desperate for inflation and real economic growth. Unfortunately....

 

1.23 chart 9

Source: Bank of Japan, as of 1/23/19

 

 

14. And the BOJ's slowing of QE should provide a headwind.

 

1.23 chart 11 

Source: Bank of Japan, as of 1/23/19

 

  

 

 

 

Are you still feeling uneasy about the markets in the new year? Read the BCM 4Q 18 Market Commentary for a debriefing on the last quarter, plus volatility insights and earnings we are tracking so far in 2019.

 

 

View Now: BCM 4Q 2018 Market Commentary 

 

 

Disclosure: The charts and info-graphics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are a recommendation to take any action. Individual securities mentioned may be held in client accounts.