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A Bird's Eye View Blog

Fireside Charts 2.11.19

By:BCM Investment Team | Date:Feb11, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

In today's Fireside Charts, the Oxford Economics Global Risk Survey results show that the US-China trade war is among investors’ top concerns in global economics. How will a hard landing for China bode for the global economy over the next 5 years? In behavioral finance news, investors tend to have a "home field"  bias when allocating to equity markets. In recent years, the U.S. ran substantial budget deficits without major interest rate repercussions. Is the "free lunch" over? Finally, money flows to Emerging Markets is surging.

 

 1. We've been writing about the last items in both charts for about a year now. However, now we're part of the consensus which makes us think a trade deal is possible. But will it be too little, too late?

 

2.11 chart 2

Source: Oxford Economics, as of 2/11/19

 

 

2. 1Q19 expected earnings changes are certainly not evenly dispersed...

 

 2.11 chart 5

Source: FactSet; as of 2/11/19

 

 

3. Investors seem to have a "home field" bias. 

 

 2.11 chart 7 final

Source: Natixis, as of 2/11/19

 

 

4. Forget the FED's balance sheet...the U.S. government's 2018 total new debt was ~$1.4 trillion, bringing the total to over $21 trillion. If interest rates rise, the interest costs will add to the budgetary shortfall in a more than meaningful way... 

 

 2.11 chart 1

Source: Pantheon Macroeconomics, as of 2/11/19

 

 

5. A good question. Has the V-shaped recovery gone too far, too fast?

 

 2.11 chart 4 final

Source: WSJ Daily Shot, as of 2/11/19

 

 

   

6. After two years of using much lower growth rates to offset the surge in the money supply post 2007-09, the FED is quietly starting up the stimulus...

 

2.11 chart 6

Source: FRED, as of 2/11/19

 

 

7. Money flow into EM equity has been surging...

 

2.11 chart 3

Source: Haver, as of 2/11/19

 

 

Want more overview of last quarter strategy commentary like in Chart #2? Read our exclusive strategy commentary for 
ETF Trends with "3 Rules Based Systems to Make Better Investment Decisions" below. 

 

3 Rules Based Systems to Make Better Investment Decisions   ETF Trends Article featuring BCM PM Dave Haviland 

 

 

 

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.