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A Bird's Eye View Blog

Fireside Charts: Prescription Drug Prices Fall, Fragility of Q1, Global Bond Yields Tumble

by : BCM Investment Team | POSTED: Mar13, 2019 | CATEGORY: Fireside Charts, Equity, Economics, Market Highlights

Prescription medications saw the biggest year over year decline on record, surpassing the second-largest drop in 1972! Looking at GDP growth between 2010-2018, we can see a correlation between slower GDP growth by quarter and the colder winter months. The first quarter tends to be significantly weaker than the rest of the year. Here's to Q2! Next, who has been buying our treasury bonds for the past decade+? Global bond yields are tumbling, as seen in both Japan and Germany. 

 

1. With all the talk in Washington one would think this chart is inverted...

 

3.13 chart 5

Source: Scotiabank Economics, as of 3/13/19

 

  

2. If ~70% of the U.S. economy is based on the consumer...

  

3.13 chart 1

Source: Global Insight, as of 3/12/19

 

 

3. To be fair, Q1 tends to be a slower growth quarter predominantly due to weather. This year's polar vortex didn't help...

 

3.13 chart 2

Source: SunTrust Advisory Services, as of 3/12/19

 

 

4. Is this telling us that no trade deal is imminent?

 

3.13 chart 3

Source: WSJ Daily Shot; as of 3/11/19

  

 

5. The U.S. yield curve inversion is back as the 1 year to 7th year is inverted. Will the "traditional" signal of a recession, the 2-10 year inversion, finally happen?

 

Source: WSJ Daily Shot, as of 3/12/19

 

 

6. Who is buying all of our Treasury bonds?

 

 3.13 chart 9

Source: WSJ Daily Shot, as of 3/11/19

 

 

7. While we can only share the most pertinent charts, the one below sums up all we see...

 

 3.13 chart 4-1

Source: FactSet, as of 3/12/19

 

 

8. Back to negative yields...

 

 

Source: WSJ Daily Shot, as of 3/13/19

 

 

9. Getting close.

 

Source: WSJ Daily Shot, as of 3/12/19

 

 

Can you count how many times we mentioned "bond" in today's chart blogpost? We have bonds on the brain as of late! Are you fully aware of how the bond market has evolved in recent times and what is expected to come next? Find out more about the construction of the indices, types of bonds, and various risks in our two part series: Changes to the Aggregate Bond Index that Advisors Should Know About.

 

 

Test Your Bond Knowledge

 

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.