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Fireside Charts: Companies Hurt from Trade War, Fannie and Freddie Pile on High Leverage Mortgages, Bitcoin Inches Back

By:BCM Investment Team | Date:May15, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

 

The S&P 500 companies with the most exposure to China are getting hurt, as seen in their Q1 earnings. Fannie and Freddie are piling on high-leverage mortgages. What did we learn in the last recession is regards to high-leverage mortgages? How will inflation look if there is a further escalation in the US-China trade war? Next, the renminibi's decline illustrates how a nation can lose control in a trade war environment. Germany's GDP rebounded in the first quarter. Bitcoin is... back? It is now over $8,000, up 60% month over month. 

 

1. With prudence, the markets are punishing those companies with the most sales and revenue exposure to China.

 

 

Source: FactSet, as of 5/13/19

  

 

2. Did they learn nothing from the great recession?


 Source: Inside Mortgage Finance, as of 5/14/19

  

 

3. Will the FED and our economy get an uptick in inflation from an unexpected source? 

 

5.15 chart 1

Source: Goldman Sachs, as of 5/14/19

 

  

4. In a low GDP growth world, will these tip the scale towards recession?

Source: Oxford Economics, as of 5/14/19

  

 

5. The Chinese have put a lot of thought into their retaliatory tariffs, targeting goods made in Republican districts. Unfortunately, this includes many U.S. farmers...

 

Source: WSJ Daily Shot, as of 5/14/19

 

 

6. An example of how governments can lose control in a trade war...



Source: Bloomberg, as of 5/14/19

 

 

 

7. Will China be "forced" to use more stimulus?

Source: WSJ Daily Shot, as of 5/13/19

 

 

8. China does have to be careful as once jobs/factories are moved to other emerging market countries, they are highly unlikely to return...

 


Source: Pictet, as of 5/15/19

 

 

9. 0.4% GDP growth is not exactly stellar, but we'll take any improvement we can ...

Source: Pictet, as of 5/15/19

 

 

10. Here we go again. Did some forget that ~$1.7 billion of crypto-currency was stolen last year? ~$1 billion was from exchanges that trade these currencies.

 

Source: WSJ Daily Shot, as of 5/14/19

 

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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.