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A Bird's Eye View Blog

Fireside Charts 1.4.19

by : BCM Investment Team | POSTED: Jan04, 2019 | CATEGORY: Fireside Charts, Equity, Economics, Market Highlights

Today’s Friday chart blog is slightly longer than usual due to recent market activity – “bear” with us for important data points! Despite significant market swings, the U.S. consumer is still in a better place than in 2007. The ISM Manufacturing report was well below survey consensus following the grim regional manufacturing reports we shared in the last blog. However, Brazil's manufacturing seems to be in better shape. Based on 32 country indices, over 50% of  global equity markets are now in Bear market and almost all are in correction territory. Ask yourself: Is the worst of the global slowdown over?

 

1. As a whole, the U.S. consumer is in much better shape than in 2007!

 

1.4 chart 7

Source: J.P. Morgan Asset Management, as of 1/3/19

 

 

2. The markets are now reasonably priced but they can go to extremes.

 

1.4 chart 6

Source: J.P. Morgan Asset Management, as of 1/3/19

 

 

3. The trade war's effects have been brutal...

 

1.4 chart 10

Source: J.P. Morgan Asset Management, as of 1/3/19

 

 

4. Yesterday saw the U.S. catching the trade war contagion...lower manufacturing data and some major earning warnings.

 

1.4 chart 11

1.4 chart 11 part 2

Source: WSJ Daily Shot, as of 1/3/19

 

 

5. The 2018 trend is not a healthy chart.

 

 1.4 chart 5

Source: IHS Markit, as of 1/3/19

 

 

6. Brazil is bucking the trend...

 

1.4 chart 3

Source: WSJ Daily Shot, as of 1/3/19

 

  

7. Current inflation remains subdued.

 

1.4 chart 8

Source: J.P. Morgan Asset Management, as of 1/3/19

 

 

8. So other than "normalization" or "reloading the gun" for the next recession, what is the FED worried about?

 

1.4 chart 9

Source: J.P. Morgan Asset Management, as of 1/3/19

 

 

9. The repatriation of corporate earnings from abroad appears to slow down.

 

1.4 chart 13-2

Source: Thomson Reuters Datastream, as of 1/4/19

 

 

10. Tracking tax revenue is a great lagging indicator of economic activity. Here is China's consumption tax revenue...

 

1.4 chart 14

Source: Wind, as of 1/4/19

 

 

11. How are the world's equity markets doing? Even if the trade war ends suddenly, the damage has already been done...

 

1.4 chart 17

Source: Datastream, Goldman Sachs, as of 1/4/19

 

 

12. The markets love to climb "a wall of worry". Yet future profits are the concern...

 

1.4 chart 15

Source: Deutsche Bank Research, as of 1/4/19

 

 

 

 

16. Earnings forecasts have been cut in half in the U.S. (but 8% is still pretty good).

 

1.4 chart 19

Source: Datastream, as of 1/4/19

 

 

15. But there is always hope and optimism!

 

1.4 chart 18

Source: Oxford Economics, as of 1/4/19

 

 

 

We are starting to feel like the "Negative Nancy" of the crowd due to the tone of our recent chart blogs, and we want to hear how you feel about some of these current market topics. Risks surrounding the global outlook include the trade war and the impact of US interest rate hikes on emerging markets. Do you agree the worst of a global slowdown will pass by Q1? 

 

Share Your Thoughts:   Global Slowdown of 2019

 

  

 

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.