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A Bird's Eye View Blog

Fireside Charts: Communications Sector Performance, Policy Rate Peaks, and Money Supply Expansion

by : BCM Investment Team | POSTED: Feb25, 2019 | CATEGORY: Fireside Charts, Equity, Economics, Market Highlights

Friday’s market close, marking the longest win streak for the DOW in over two decades, only further proves our recent comments on how extreme 2019 has been thus far. The relatively new Communications sector may break out of its three year trend soon – this recently strong performer is up 11.17% YTD. A quick update on the U.S. dollar and commodities. Next, we share a chart on the historical lags between central bank rate peaks and recessions for the U.S., Europe, and United Kingdom. Finally, on the heels of the recent FED remarks, we wonder is how the money supply expansion will fare in the current market environment.

 

1. Some more info on how extreme 2019 has been already.

 

2.25 chart 2

Source: Thechartstore.com, as of 2/25/19

 

 

2. Will the revamped Communications Sector finally break out of its three year channel?

 

2.25 chart 3

Source: Thechartstore.com, as of 2/25/19

 

 

3. Since the end of 3Q18 the USD has been in a trading range...

 2.25 chart 5-1

Source: WSJ Daily Shot, as of 2/20/19

 

 

4. If history repeats itself, here are some average times to recession...

 

2.25 chart 1

 Source: Oxford Economics; as of 2/25/19

 

  

5. The 2-7 year yield inversion stubbornly remains in place.

 

2.25 chart 4

Source: Thechartstore.com; as of 2/25/19

 

  

6. ...While many commodities are seeing upward price movement.

 

2.25 chart 6

Source: Thechartstore.com, as of 2/25/19

 

 

7. An important part of QE that often gets forgotten is the money supply expansion...

  

2.25 chart 7

Source: Thechartstore.com, as of 2/25/19

     

 

Upon the Federal Reserve's announcements last week to remain "patient" with raising interest rates and to continue trimming its balance sheet of $4 trillion, it is a far cry from last year's 4x rate hikes and aggressive policy stance. 

 

A year into Fed Chairman Jerome Powell’s term, what would you say to him about his performance and efficacy if you had the chance? BCM Portfolio Manager does just that in our latest piece, An Open Letter to Jerome Powell, on ETF Trends.  

 

An Open Letter to Jerome Powell By: BCM Portfolio Manager Dave Haviland on ETF Trends

 

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.