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A Bird's Eye View Blog

Fireside Charts: U.S. Household Net Worth to GDP Ratio Hits Record High, The USD Continues to Climb, And Junk Bond Yields Approach 2017 Lows

By:BCM Investment Team | Date:Sep23, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

Warning: the Fed's recent shopping spree may leave you with sticker shock. They added over $75 billion of assets to their balance sheet last week alone, and plan to continue injecting money into the markets daily through October in an attempt to stabilize rates. Will this and other easing measures be enough to stave off a large-scale slowdown though, when credit expansion has primarily been serving to drive asset prices higher and having a much smaller effect on GDP growth? Finally, according to a Federal Reserve report released on Friday, the ratio of U.S. household net worth to GDP hit an all-time high of 5.3 in Q2. With numbers like that, should we expect to see more Americans heading out on shopping sprees of their own?

1. The need for the Fed to inject short term liquidity has ended QE reversal with a bang!

 

Source: The Chart Store, as of 9/20/19

 

 

2. Are the world's Central Banks "pushing on a string?"

 

Source: Stifel, as of 9/23/19

 

 

3. Let's not forget that modern rigs can drill in 2 directions at once, cutting the need in half for the same production. And then their are the DUCS...

 

Source: WSJ Daily Shot, as of 9/23/19

 

 

4. Just enough geopolitical uncertainty and higher rates here at home have been driving the USD higher.

 

Source: The Chart Store, as of 9/20/19

 

 

5. The yield on junk bonds is near the 2017 lows...

 

Source: The Chart Store, as of 9/20/19

 

 

6. The ratio of household net worth to GDP hit an all-time high, largely thanks to the stock market.

 

 Source: WSJ Daily Shot, as of 9/10/19

 

 

7. See... management by tweet causes a lot of vol...

 

 Source: WSJ Daily Shot, as of 9/10/19

 

 

8. Just ask the cartoonists.

 

Source: Hedgeye, as of 8/26/19

 

 

9. A look at the world's biggest financial centers:

 

Source: How Much, as of 9/23/19

 

 

Nervous about how to help satisfy client demand for consistent fixed-income returns after the Fed cut interest rates even further last week? For an overview of how to use the Total Return concept to meet your clients' needs, check out our piece by BCM Portfolio Manager Dave Haviland on ETF Trends.

 

Finding Total Return on ETF Trends

 

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.