• Login
  • Register
A Bird's Eye View Blog

Fireside Charts: GDP Beats Expectations Despite Declining Manufacturing Reports, Coloring Expectations for Next Week's Fed Meeting

By:BCM Investment Team | Date:Jul26, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

U.S. Q2 GDP was released this morning at 2.1%, dropping from Q1's 3.1% figure but still beating expectations. While many are relieved and take the news as a positive sign of dodging consequences of the trade war, US Manufacturing PMI has hit its lowest point since August 2009 and is now riding the line between growth and contraction at 50.0—a significant slide that is largely attributable to depressed trade. Meanwhile, the Kansas City Fed Manufacturing Index has slipped below 50.0 and now—like Richmond—is in active contraction. Also, with their yield curve inversion and manufacturing demand continuing its downward trend, could Germany be the first major economy to enter a recession? With the world experiencing its third consecutive quarterly drop in trade volume, they may not be the only ones...

 

 

1. When we say "on the precipice," we mean it! The United States is now at the dividing line between manufacturing growth or contraction. The trend is even more disturbing...

 

 Source: WSJ Daily Shot, as of 7/25/19

 

 

2. The Kansas City Fed joined NY and Richmond with a poor print... and actual contraction.

 

Source: WSJ Daily Shot, as of 7/26/19

 

 

3. Will Germany be the first major economy to enter a recession?

 

Source: The Daily Feather, as of 7/26/19

 

 

4. Is anyone listening?!

 

Source: Economics and Strategy Group, National Bank of Canada, as of 7/26/19

 

 

5. The world's 11th largest economy just avoided a recession, commonly defined as two consecutive quarters of negative GDP growth...

 

Source: WSJ Daily Shot, as of 7/26/19

 

 

6. "Poor man's gold" is breaking out. Is it sustainable?

 

Source: WSJ Daily Shot, as of 7/25/19

 

 

7. Will the discord in Washington compel the "silent majority" to go the polls?

 

 Source: Mehlman Castagnetti Rosen & Thomas, as of 7/25/19

 

 

Results of the ECB meeting were slightly less dovish than expected, as President Mario Draghi said yesterday that he does not expect to see Europe enter a recession, despite Germany's recent slowdown. They kept rates on hold however, and hinted at upcoming cuts and a readiness to employ additional stimulative measures. Should we expect similarly-mixed news out of next week's Fed meeting? Many have been anticipating a 50 basis point cut to interest rates, but are now modulating expectations based on the ECB's actions. Have your expectations for a rate cut changed since the ECB meeting? Click below to let us know!

 

 

Yes/No: Have Your Expectations  for the Fed Meeting Changed?

 

 

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.