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BCM Investment Team

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Recent Posts

Fireside Charts: A Different Perspective on the Yield Curve Inversion and How This Situation is Unique

August 21, 2019

Everywhere you turn, there's chatter that yield curve inversions are an indicator of impending recession. Since the inversion, many economists and experts have publicly shortened their estimated timelines for when the next recession will hit. Yesterday, President Trump went so far as to confirm that he's considering various tax reductions—i.e. government stimulus—to prop ...

Fireside Charts: Safe Haven Assets Surge as Investors Seek Protection From Market Volatility

August 19, 2019

Investors seem to be piling into safe haven assets as volatility in both the stock and bond markets continues to make headlines this week. A move to treasuries may be risky though as their yields are still hovering around historic lows, despite a small recovery for the 30-year following hints that the U.S. may begin to issue longer-term debt. However, this struggle does not seem to have ...

Fireside Charts: Retail Figures Beat Expectations While U.S. 30-Year Yield Hits All Time Low, the 10-Year Yield Hits a 3-Year Low, and the Yield Curve Inverts

August 16, 2019

All eyes have been on the bond market this week as the 30-year U.S. Treasury yield sunk below 2% for the very first time, the 10-year yield hit its lowest point in three years, and the yield curve inverted. Sinking yields are a consequence of rising prices, meaning demand from worried investors—i.e. those looking for "safe" assets—is on the rise. How safe are bonds though when the global pool of negative-yielding debt is now approaching $17 trillion, up from last week's high of $15 trillion? But beyond a

Fireside Charts: Recession Fears Surge Following Yield Curve Inversion and the Dow Plummets Over 700 Points

August 14, 2019

Today kicked off with reignited recession fears as the 2-10 yield curve officially inverted for the first time since 2007—an event which preceded each of the last seven recessions. This lends credence to Bank of America's assessment that the U.S. has a greater than 30% likelihood of entering a recession within the next year. Yields have continued to drop ...

Fireside Charts: Things Finally Start to Calm Down at Home While Geo-Political Unrest Sparks Market Activity Overseas

August 12, 2019

The trade war sent the markets on a wild ride last week, but—surprisingly—the S&P 500 ended last week largely unchanged and just over 3% away from all-time highs. Despite hitting several all-time highs in the last 18 months, the S&P 500 has made no meaningful gains as we are reminded that losses require an outsized gain to break even. Volatility is still a source of concern—should we brace ourselves for a more sustained ...

Fireside Charts: Cautious Optimism After the Recent Rally

August 9, 2019

After an eventful week, U.S. stocks shot back up in an impressive rally yesterday, However, gold—a popular safety asset—also surged, achieving its highest close in over five years and indicating that many investors may lack faith in the bounce and are hedging their bets. The trade war may be playing a large part in that uncertainty, and there's likely more to come as the White House postpones its decision on whether to allow U.S. companies to restart business with Huawei Technologies. And it looks like things will ...

Fireside Charts: More Central Banks Announce Aggressive Rate Cuts, Sparking Dramatic Shifts in the Currency and Bond Markets

August 7, 2019

The dovish trend is picking up steam as central banks in New Zealand, Thailand, and India all announce larger-than-expected cuts to their benchmark interest rates. New Zealand delivered double the expected reduction at 50 basis points, sending the NZ dollar plummeting. The Australian dollar hasn't fared much better, hitting a decade low, while the U,S,/China currency tensions heat up. There is some good news for the U.S. worker however, as job openings remain near record highs and wage growth continues. These trends, along with the U.S.'s own interest rate ...

Fireside Charts: China Strikes Back by Letting Yuan Plummet to 11-Year Low, Emerging Markets Take a Hit, And More Signs of an Impending Slowdown

August 5, 2019

Last week's market unrest continues as China allowed the Yuan to sink to its lowest level in over a decade—an aggressive response to President Trump's proposal of a new round of 10% tariffs. The devaluation included allowing the Yuan to fall below the symbolic 7-per-dollar mark, suggesting that China is ready to embrace more aggressive tactics and settle in for a protracted trade war. However, in a public statement, the People’s Bank of China (PBoC) claims that it

Fireside Charts: Global Manufacturing Numbers Continue to Disappoint, Trump Tweet Throws Fuel on the Fire, and the Jobs Report

August 2, 2019

The global manufacturing slowdown continues, and U.S. manufacturing in particular has entered its sharpest downturn since the 2009 financial crisis. However, today's jobs report shows a solid labor market and wage growth surpassing expectations. The markets, usually quick to react to keystone economic reports, had a measured response though—likely due to uncertainty around the recent rate cut and renewed trade fears. While we thought the trade war would remain in limbo until September, President Trump took to Twitter to announce a new round of 10% ...

Fireside Charts: We're Shocked! Shocked I Tell You.

July 31, 2019

They did it! Unsurprisingly, the Fed announced a quarter-point rate cut this afternoon—the first in over a decade—which has already lead to stocks turning negative. Check back in on Friday to see how the decision affects other key economic metrics over the next few days...

 

The Fed isn't alone in its current aversion to high interest rates—all central banks are either cutting or holding steady. Should we expect to see a mass return of QE in the coming months? Perhaps... given the fact that worldwide PCE inflation is still muted. The ...