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A Bird's Eye View Blog

Fireside Charts: 2020 Projections, a Review of the Decade, and What's Captured Investor Interest?

By:BCM Investment Team | Date:Jan22, 2020 | Category: Equity, Economics, Market Highlights, Fireside Charts

As we settle into the second week of earnings season, let's take a look at what the analysts see coming in the next year. 4Q19 forecasts are predicting earnings will be down year-over-year, but analysts seem to see nothing but blue skies ahead in 2020 and project four straight quarters of YoY earnings growth. And while we're currently in one of the longest periods of market calm on record, could this be the calm before the storm? A look at the charts shows just how far outside the norm the previous decade's high-return/low-volatility combo has been, and we may be due for a return to the mean. Meanwhile, we talk a lot about the Fed's policy moves and their economic implications, but are we giving too much credit to interest rates when they're affecting a smaller and smaller share of the economy? Some analysts seem to think so, but we wouldn’t risk saying it to anyone with a mortgage or car loan to pay off. Finally, investor interest in strategies backed by data science, machine learning, and quantitative research has skyrocketed in the past 10 years—have you added any of these strategies to your portfolio yet?

 

 

1. What could possibly go wrong?

 

2020 earnings projections

Source: WSJ Daily Shot, from 1/21/20

 

 

2. The markets have felt quiet for a while now...

 

S&P 500 calm periods

Source: WSJ Daily Shot, from 1/21/20

 

 

3. More ammo to prepare your clients that the next decade is likely to be much different than the current/last one...

 

S&P 500 rolling 10-year returns volatility

Source: WSJ Daily Shot, from 1/21/20

 

 

4. Another interesting comparison to the late 1990's...

 

U.S. retail sales and manufacutring

Source: WSJ Daily Shot, from 1/22/20

 

 

5. Yet rates still trickle through to the consumer...

 

interest-sensitive sectors share of GDP

Source: WSJ Daily Shot, from 1/21/20

 

 

6. Our firm has a modest student loan repayment plan. We feel it is the right thing to do!

 

student loans

Source: WSJ Daily Shot, from 1/22/20

 

 

7. Asian markets are down in general based on a new disease breaking out in China.

 

JP Morgan Asia Currency Index

Source: WSJ Daily Shot, from 1/21/20

 

 

8. I guess our systems, now up to 10 years old, are becoming "all the rage."

 

Interest in data science machine learning

Source: WSJ Daily Shot, from 1/21/20

 

 

9. The bottom two are in our wheelhouse!

 

interest data science quant research

Source: WSJ Daily Shot, from 1/21/20

 

 

 

 

 

 

 

If strategies built on data science, quant research and machine learning are currently missing from your arsenal, check out the BCM strategy guide to see which of our rules-based systems can best fill the gap and help you Deliver What Investors Expect®.

 

Get the Strategy Guide

 

 

 

 

 

 

 

 

 


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.