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A Bird's Eye View Blog

Fireside Charts 10.5.18 - Bonus Friday!

by : BCM Investment Team | POSTED: Oct05, 2018 | CATEGORY: Fireside Charts, Equity, Economics, Market Highlights

The 30-year mortgage rate sprung to almost 5%. Strong non-manufacturing PMI and employment data sent the U.S. dollar and bond yields significantly higher. An update on the current trade climate, the trade war has a much more significant impact on corporate profits than on the overall economy. We also share global trade flows in a single chart—make sure you've had coffee before you read!  We conclude the post with a view of every country's percentage of world debt. 

 

1. A great chart...

 

10.5 chart 13

Source: WSJ Daily Shot, As of 10/3/18

 

 

2. This represents a major portion of our consumer driven economy.

 10.5 chart 8

Source: WSJ Daily Shot, As of 10/2/18

 

 

3. Is the aggregate of the FED's actions (QE reversal + rate increases) going to cause a recession?

 

10.5 chart 14-1

Source: WSJ Daily Shot, As of 10/5/18

 

 

4. Strong non-manufacturing PMI and jobs data, together with Hawkish comments from the FED's Chairman Powell, sent bond yields sharply higher.

 

US 10yr Government Bond Yield-1

Source: WSJ Daily Shot; As of 101/18

 

 

5. Rising rates across the yield curve should have a profound effect on housing sales, new homes and the cost of all homes...

 

 10.5 chart 9-1

Source: WSJ Daily Shot, As of 10/4/18

 

 

6. I love this! Compared to the U.S. these rate increases are basically rounding errors...yet the BOJ is considering further intervention!

 

10.5 chart 3

Source: WSJ Daily Shot, As of 10/4/18

 

 

7. Rising rates will also have a profound effect on our Government's budget deficit.

 

 10.5 chart 10

Source: WSJ Daily Shot, As of 10/3/18

 

 

8. This in turn sent the USD sharply higher.

 

10.5 chart 2-1

Source: WSJ Daily Shot, As of 10/3/18

 

 

9. Higher energy prices do not bode well for gas prices nor inflation as a whole...

 

10.5 chart 5-1

 

Source: WSJ Daily Shot, As of 10/3/18

 

 

10. Where is Mr. Beaks and that crop report?

 

10.5 chart 12

Source: WSJ Daily Shot, As of 10/4/18

 

 

11. A nice illustration of what we have been writing about all year: Tariffs could "destroy" 1/4 of our GDP growth and corporate profits...and it will get worse if the trade war continues!

 

 10.5 chart 6

Source: WSJ Daily Shot, As of 10/3/18

 

 

12. Coffee required...

 

10.5 chart 7

Source: WSJ Daily Shot, As of 10/4/18

 

 

13. Another illustration on why tariffs are a poor instrument to use...they tax multi-national companies, including American multi-nationals, more than the targeted host country's companies.

 

10.5 chart 4

Source: WSJ Daily Shot, As of 10/4/18

 

 

14. A nice primer on our largest trading partner...

 

10.5 chart 11 

Source: WSJ Daily Shot, As of 10/5/18

  

 

15. A great pictogram of the world's debt by country.

 

10.5 chart 15

Source: WSJ Daily Shot, As of 10/3/18

 

 

For more information on the current status of U.S. trade relations with their foreign counterparts, keep up with our previous chart blog post. 

 

Fireside Charts: Click Here for the Most Recent Post

 

 

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.