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A Bird's Eye View Blog

Fireside Charts 12.14.18

by : BCM Investment Team | POSTED: Dec14, 2018 | CATEGORY: Fireside Charts, Equity, Economics, Market Highlights

Across the globe, corporate revenues have declined in the last few weeks. This is not positive news, considering almost half of the S&P 500 Index® revenue comes from overseas. Recent GDP revisions have been down for many economies, especially those in Europe and Latin America. The federal budget deficit is expected to accelerate over the next few years. Are we at all surprised? Lastly, further deterioration to China's economy is overshadowing positive strides for Japan's.

 

We want to acknowledge that as of late our chart posts have had a bearish tilt. Read all the way to the end of today's post and you can find out why. 

 

1. If 48% of the S&P 500's revenue is from overseas and this trend continues...

 

 12.14 chart 8-1

Source: ASR Ltd./Factiva.com/Datasteam, as of 12/13/18

 

 

2. If you feel that the markets have been volatile as of late, you would be correct...

 

12.14 chart 5-1

Source: WSJ Daily Shot, as of 12/12/18

 

 

3. The FED's target for inflation is 2%. Rate hikes are typically used to keep inflation and the economy from overheating. Does anyone see inflation as a problem here?

 

12.14 chart 1

Source: WSJ Daily Shot, as of 12/12/18

 

 

4. Inflation has been highly correlated with the price of oil. This makes sense as we need to heat our homes, drive our cars, and fertilize, grow and transport our food. The price of oil has declined by 1/3 since October. Maybe the FED should be concerned with deflation or stagflation…

 

12.13 chart 2

Source: WSJ Daily Shot, as of 12/13/18

 

 

 5. "Bubbles, bubbles, toil and troubles..."

 

12.13 chart 3

Source: Federal Reserve, as of 12/13/18

 

 

6. If you thought a $1 trillion annual budget deficit was bad... 

 

12.14 chart 4

Source: Oxford Economics, as of 12/13/18

 

 

7. Is the level of U.S. corporate debt going to be a challenge going forward?

 

12.14 chart 6 final

Source: Oxford Economics, as of 12/13/18

 

 

8. Leveraged loans are taking it on the chin...

 

 12.14 chart 12

Source: WSJ Daily Shot, as of 12/11/18

 

 

9. An update on GDP for EM and some southern European countries.

 

12.14 chart 7-1

Source: Bloomberg, Fitch Solutions, as of 12/13/18

  

  

10. The world's second largest economy broke through its consolidation. Their growth is slowing...

 

12.14 chart 9

Source: WSJ Daily Shot, as of 12/13/18

 

 

11. The consumer side of their economy has been declining for years...

 

 12.14 chart 10

Source: WSJ Daily Shot, as of 12/13/18

 

 

12. The Chinese data is overshadowing this terrific rebound in Japan.

 

 12.14 chart 11

Source: WSJ Daily Shot, as of 12/13/18

 

 

 

 

 

Fireside Charts followers, its time that we talk about the R-Word... Recession. If you have closely followed our posts like the one above, we have to accept that we can no longer take the health of the U.S. economy for granted. Whether you’ve come to this same conclusion or not, we still encourage you to educate yourself on the confluence of factors that may tip us over the edge.

 

In addition, we tell all investors no matter their market outlook, they should build a portfolio that they would feel comfortable holding in good times and bad. Read "It's Time to Talk About the R-Word" below to learn more. 

 

It's Time to Talk About the R-Word

  

 

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.