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A Bird's Eye View Blog

Fireside Charts: Strength of the USD, Secular versus Cyclical Markets, and the Top 1%

By:BCM Investment Team | Date:Mar11, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

Against a backdrop of U.S. government reports, weakening economic data out of Europe and China, and continued trade turbulence, the U.S. dollar strengthened. The 10 Year US Treasury yields indicate that a 3-year secular bear market could potentially win out over the 35-year cyclical bull. Positive news for three European nations: France, Italy and Spain's industrial production rebounded in January, exceeding forecasts. Lastly, what level of income would put you in your nation's top 1%?

   

1. Recently the USD has been strengthening, not easing like many have predicted (or want)...

  3.11 chart 2

Source: Thechartstore.com, as of 3/11/19

 

 

2. A battle seems to be forming in the Treasury markets...a 35 year cyclical bull market versus a 3 year secular bear. Who will win?

 

3.11 chart 1

Source: Thechartstore.com, as of 3/11/19

 

 

3. An update on our trade imbalance... 

 

3.11 chart 3

Source: Deutsche Bank; as of 3/5/19

 

 

4. While rig counts have been declining, don't forget there are about 10x more Drilled but Uncompleted (DUCS) wells;  U.S. supply can keep on rising if these wells are completed (turned on)...

 

3.11 chart 6

Source: WSJ Daily Shot, as of 3/8/19

 

  

5. Some welcome news out of Europe!

 

3.11 chart 4-1

Source: Pictet WM, as of 3/6/19

 

  

6. ...yet Europe's largest economy missed again...

 

 3.11 chart 5

Source: WSJ Daily Shot, as of 3/5/19

 

 

7. What level of income would you need to be in the top 1% in your country?

3.11 chart 7 reserve

Source: WSJ Daily Shot, as of 3/11/19

 

 

After losing a hour of sleep this weekend, are you also hitting snooze on evaluating your Q1 portfolios and asset allocation? For easy-to-digest, straightforward, and helpful insights on how to mitigate large losses for the remainder of this year, read The Probability of Another 20%+ Drawdown is Higher Than You Might Expect on ETF Trends by BCM Portfolio Manager Dave Haviland. 

 

The Probability of Another 20%+ Drawdown is  Higher Than You Might Expect

 

 

 

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.