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Fireside Charts: 70% of No Recession in the Next 12 months from NY FED, Global Manufacturing in Contraction Mode, FED Easing During Trade War

By:BCM Investment Team | Date:Jun05, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

The Mega Millions jackpot has climbed higher yet again. The top prize is now $530 million. However, you may not need to rush out and test your numbers on this jackpot... the NY Fed's yield-curve model is putting the probability of a recession in 12 months at 30%. Global manufacturing is in contraction mode, with the weakness driven by advanced economies. Our northern neighbor Canada is unfortunately in that category, and has entered a manufacturing recession.  Will a rate cut from the FED keep the bull market going? It will be a challenge to turn the tide, especially with tight liquidity conditions we are seeing.


1. ...or a 70% chance of nothing...


Source: WSJ Daily Shot, as of 6/5/19

2. Will the trade wars exacerbate the coming recession?



 Source: WSJ Daily Shot, as of 6/4/19



3. We found one country bucking the trend....


 Source: IHS Markit, as of 6/4/19



4. The Milwaukee FED missed badly and already is in contraction...



Source: WSJ Daily Shot, as of 6/3/19



5. If U.S. manufacturing continues to grow at a declining rate, Treasury yields, based on history, should follow...



Source: WSJ Daily Shot, as of 6/3/19



6. Germany's PMI remains in contraction, the U.K. also just entered manufacturing contraction mode.


Source: WSJ Daily Shot, as of 6/3/19



7. Will the U.S. manufacturing sector start contracting (reading below 50)?


Source: WSJ Daily Shot, as of 6/3/19



8. Yet another economy in manufacturing contraction.


 Source: tradingeconomics.com, as of 6/5/19



 9. The FED has never had to deal with a trade war before...


 Source: Oxford Economics, as of 6/5/19





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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.