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A Bird's Eye View Blog

Fireside Charts: Q1 2019 Growth, American Farmers Struggle, and a Strong Yuan out of China

By:BCM Investment Team | Date:Feb27, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

 

Following Jerome Powell’s congressional testimony on Monday, Treasury yields and the US dollar shot lower. If only we could write to him directly!  The current economic expansion that started in June of 2009 is approaching record-breaking duration. Will it go out with a bang or fade away? While the Chicago FED Report was disappointing, other areas of the country had more favorable outcomes. Canadian farmers have been selling more soybeans to China, and in addition to other weak commodity indices, the U.S. farmer is feeling the effects of the trade war. Plus, you’ll find a comparison of the 10yr bond yields across select economies and we wrap up this post with a chart onhow the Chinese renminbi continues to strengthen.

 

1. Will the current economic expansion, soon to be the longest ever, go out with a bang or just fade away?

 

2.27 chart 2

Source: Bloomberg, as of 2/25/19

 

  

2. The FED, versus the Bank of Canada, seems to have painted itself into a corner as any rate increase will likely shock the markets.

  

2.27 chart 7

Source: WSJ Daily Shot, as of 2/27/19

 

 

3. Another nice rebound from the Richmond FED...

 

 2.27 chart 6

Source: WSJ Daily Shot, as of 2/27/19

 

  

4. While the Chicago FED report disappointed, the Dallas report had a most welcome surprise!

 

2.27 chart 1

Source: WSJ Daily Shot, as of 2/25/19

 

     

5. Another example of why tariffs fail: In a global marketplace, supply and demand will find equilibrium. In this case, Canada has filled the void and U.S. farmers lose out.

  

2.27 chart 8

Source: WSJ Daily Shot, as of 2/27/19

    

 

6. The U.S. farmer is still feeling the brunt of the trade war.

 

2.27 chart 4

 Source: Bloomberg; as of 2/25/19

 

 

7. Why did Starbucks crush its earnings? Look at their main cost of goods sold...

 

2.27 chart 11

Source: WSJ Daily Shot, as of 2/27/19

 

 

8. An update to global trade and manufacturing...

 

2.27 chart 5-1

Source: Deutsche Bank Research; as of 2/26/19

 

 

9. When manufacturing and trade deteriorate, GDP is soon to follow...

 

2.27 chart 3

Source: CrossBorder Capital, as of 2/26/19

 

 

10. Which one of these is not like the others?

 

 2.27 chart 12

Source: WSJ Daily Shot, as of 2/27/19

 

 

11. How bad is it in Europe?

  

2.27 chart 9

Source: WSJ Daily Shot, as of 2/27/19

   

 

12. Some good news: A stronger Yuan should lower the trade deficit with China.

  

 2.27 chart 10

Source: WSJ Daily Shot, as of 2/27/19

 

The trade war has had significant effects on the American agricultural industry and farmers throughout the last year, and outputs such as soybeans, beef, dairy, wheat, and more have been affected. With that, on On February 2nd of this year, following two days of trade talks, China reportedly bought two million tons of U.S. soybeans as a sign of good faith.

Does this recent win for Canada change things? What is are to come of U.S.-China trade negotiations? Sound off to us below:

 

 Share Your Thoughts:   U.S.- China Negotiations 

 

 

 

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.