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Fireside Charts: Consumer Debt Skyrockets in China and Unprofitable IPOs Party Like it's 1999

September 27, 2019

Goldman Sachs analysts anticipate that less than 25% of companies going public in 2019 will net any income this year, and are expected to produce the lowest profits since the dot-com era two decades ago—despite raising a record amount of cash from their IPOs. Could a little Y2K-era anxiety be in order as well? Shale-oil output is on the rise in the top five U.S. basins as well completions tick up and ...

Fireside Charts: U.S. Manufacturing Hits 5-month High as Europe Contracts and a Look at How Stimulus Affects the Markets

September 25, 2019

Employment indices are softening in Europe as it ventures deeper into manufacturing contraction, helmed by Germany which saw its manufacturing PMI decline at it's fastest pace in a decade (re: since the recession era). We've already seen the yield curve invert; is this another signal of impending recession? Stateside manufacturing, however, ticked up slightly this month, beating expectations at a ...

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

September 23, 2019

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 ...

Fireside Charts: U.S. Broad Money Supply Continues to Climb, Manufacturing Slows in Philadelphia, and a Historical Look at Stocks Following 25 bps Interest Rate Cuts

September 20, 2019

While the Fed's second consecutive quarter-point rate cut this week disappointed many—including President Trump—who were hoping for more aggressive action, we're encouraged by a look at how the S&P has historically performed in similar circumstances. An average 12-month return of 16.7% doesn't sound too shabby! The market is now pricing in a ~65% chance of another cut by the end of 2019, but

Fireside Charts: U.S. Industrial Production Hits 2019 High,  Core Inflation Measures Diverge and Growth vs. Value Outperformance

September 18, 2019

While we wait on Chairman Powell's speech this afternoon, let's take a look at what else is going on:

 

U.S. Industrial Production rebounded in August to reach a 2019 peak, approximately tripling the expected 0.2% print. Could this be a good sign of impending recovery for U.S. manufacturing? Turning an eye to consumers, the spread between core CPI and core PCE rose sharply in 2019, approaching all-time highs and complicating interpretations of inflation. While the Fed favors PCE, should we expect the nearly 1% higher CPI to factor ...

Fireside Charts: Real U.S. Treasury Curve Turns Positive Heading into FOMC Meeting and More Evidence of Slowdown in China

September 16, 2019

While futures have declined slightly following the Saudi oil attacks, we saw equities rally last week thanks largely to renewed trade war optimism. Both nations have made concessions in recent weeks, leading to increased expectations that an interim deal could be struck when negotiators meet in October. Economic reports out of China have added fuel to the speculative fire as industrial production, retail sales, and fixed asset investment all fell short of estimates in a broad demonstration of

Fireside Charts: ECB Cuts Rates to Record Lows and Restarts QE — Is the U.S. Far Behind?

September 13, 2019

While QE just officially came to a close in the U.S. on 7/31, the ECB announced yesterday that—in addition to a rate cut to record lows—it will relaunch its easing program in October and continue it for "as long as necessary." Will the Fed follow suit when they meet on Wednesday? More importantly, will these measures be enough to stimulate the slowing domestic and global economies? As we can see in the charts, it can take up to eight months for ...

Fireside Charts: Global Trade Slowdown Flashes Reminder of Financial Crisis and Have We Seen the Bottom for Treasury Yields?

September 11, 2019

While stocks have edged higher off encouraging trade war news this week, as you'll see in the charts below, Chinese investment in the US has plummeted over 80% since 2016, the Yuan has depreciated so significantly that the exchange rate can only exacerbate costs rather than offset them, and world trade as a whole is contracting at the fastest pace in nearly a decade—i.e. since the great recession. Are we in too deep at this point for ...

Debunking Some Bunk: Is September Really That Bad a Month?

September 10, 2019

Sometimes our industry grabs on to a concept and cannot let it go. Is September the worst month from a performance standpoint? Does it always/mostly go down? Should one avoid the markets in September? Let’s take a quick look.

Fireside Charts: Latest Jobs Report Disappoints, Manufacturing Slowdown Continues, and Gold Continues to Prosper as Many Seek Safety

September 9, 2019

While Friday's jobs report was largely disappointing—the retail, trade, and transportation sectors all saw a more significant net decline of ~11,000 workers in August, and private sector employment expanded at the slowest pace since February—focus is primarily centered on central banks this week. The ECB is expected to cut rates again when they meet on Thursday (moving further into negative territory), and many ...