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A Bird's Eye View Blog

Fireside Charts 2.1.19

By:BCM Investment Team | Date:Feb01, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

Let this sink in: after the worst December in almost a century, it was the best January for U.S. stocks in 30 years. Are the markets going too far, too fast? The U.S. added jobs last month despite the record-breaking government shutdown. Our northern neighbors in Canada are seeing insolvencies rise. Italy is officially in its third recession over the past decade, and overall business and economic indicators continue to deteriorate in Europe. China's manufacturing sector contracted further, possibly alerting officials to place stimulus efforts. Finally, go Pats and have a safe and fantastic Super Bowl weekend!  

 

1. The $100,000 question...

 

2.1 chart 13

Source: Bloomberg; as of 1/29/19

 

 

2. The Government shutdown showed up in the jobs report.

 

 2.1 chart 5

Source: WSJ Daily Shot, as of 1/31/19

 

 

3. One way to avoid both good and bad data is to have a government shutdown. This temporary (we hope) lack of transparency may lead to a shock when the information starts to flow again.

 

 2.1 chart 1

Source: The Terminal, as of 1/31/19

 

 

4. Another big miss from the Chicago FED.

 

 2.1 chart 6

Source: WSJ Daily Shot, as of 1/31/19

 

 

5. Some unhealthy trends from Canada...

 

 2.1 chart 2

Source: Industry Canada, WSJ Daily Shot, as of 1/31/19

 

  

6. And so it continues...

 

2.1 chart 7 final

Source: WSJ Daily Shot, as of 2/1/19 

 

 

7. Not much more to say on this...

 

 2.1 chart 3

Source: Gavekal, as of 1/31/19

 

 

8. Europe as a whole is barely hanging on to GDP growth.

 

2.1 chart 8

Source: WSJ Daily Shot, as of 2/1/19

 

 

9. However, this does not look recessionary!

 

 2.1 chart 9

Source: WSJ Daily Shot; as of 1/31/19

 

  

10. This could be great news if it turns into a new trend.

  

2.1 chart 4

Source: Gavekal, as of 1/31/19

 

  

11. China, South Korea and Taiwan are in a manufacturing contraction. Even if the trade war ends, the PBoC may need to stimulate all over again.

 

2.1 chart 10

Source: IHS Markit; as of 2/1/19

 

 

12. Similar to U.S. equity's reaction to a much more accommodative FED, hope burns eternal that the PBoC will stimulate.

 

2.1 chart 11

Source: WSJ Daily Shot; as of 1/31/19

 

 

13. India has joined the trend...

 

2.1 chart 12

Source: WSJ Daily Shot; as of 1/31/19

 

 

 

14. GO PATS!

 

2.1 chart 14

Source: Pro Football Reference; as of 2/1/19

 

After the longest bull market in history, its time to talk about the R-Word... Recession! Have you made it a resolution to start looking at your portfolios defensively? Read It's Time to Talk About the R-Word on the BCM Blog by Portfolio Manager Dave Haviland.

 

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.