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Fireside Charts: Inflation Takes Off (In Some Sectors), Earnings Season Rolls On, U.S. Crude Oil Production Sets Record High

November 15, 2019

“Fed officials should go to the doctor if they think there is no inflation in the economy,” say Chris Rupkey, chief economist at MUFG in New York. Medical care, education, and housing costs are soaring—and significantly outpacing the rest of the market. Healthcare earnings surprised in more than one way in Q3 (see the details in the charts below)... could such aggressive pricing increases be to thank? Meanwhile, despite 70%+ of companies beating earnings estimates as of last week, EPS growth rates have established some downward momentum in the last ...

Fireside Charts: Small Caps Lag, Farm Debt Set to Reach Record High, Investment Indicators Down in Leading Economies

November 13, 2019

The S&P 500 has surged over 20% and set 16+ record closes this year, but small-cap stocks have failed to follow the same pattern, and appear to be bearing the brunt of rising political, trade, and economic uncertainty. Will they continue to linger under 1600.00? The U.S. farmer is shouldering the same burden, as farm debt is projected to reach record highs this year following a 24% YoY September surge in bankruptcies. And leading economies ...

Fireside Charts: S&P 500 Tests Trend Lines, Inflation Rises in China, and Steel & Aluminum PMI Send Positive Signs on Manufacturing

November 11, 2019

Happy Veteran's Day, Fireside Charts readers! Out of respect for the holiday, the bond market is closed and no new economic reports are due out today, but even on a holiday Monday, analysts are likely keeping their eyes peeled for more U.S./China trade news. While hopes surged Thursday for an approaching deal, President Trump reiterated his rejection of the claims over the weekend, stating that the tariff reduction story was "over reported." The S&P 500 backed off its recent all-time highs in response to the confusion, and now we're left wondering if it ...

Fireside Charts: U.S. Companies Face Wave of Maturing Debt, The Trade War is Benefiting Brazilian Soybean Farmers, and a Look at Aramco's Valuation

November 8, 2019

News on earnings has been largely popular thus far as many companies continue to outperform expectations, but it isn't all good news for corporate America; $4 trillion of maturing debt is coming due over the next five years, and the historically low interest rate environment only complicates the picture. If economic growth slows further, as it is projected to do, and rates rise, both the companies themselves and fixed-income investors may be in for a bumpy ride. And though optimism around reaching a phase one trade deal—particularly following China's ...

Fireside Charts: Q4 U.S. GDP Estimates Revised Lower Amid Sluggish Inflation & Manufacturing Prints, Conflicting Reports Emerge on China

November 6, 2019

While Q3 GDP growth surprised at 1.9%, the New York and Atlanta Feds' projections for Q4 see levels dropping to 1%. Slowing growth, the inverted yield curve, and ongoing trade woes have many worrying about an approaching recession, but a look at the charts shows that select advanced economies have historically been able to withstand global downturns. While wage inflation has finally ticked up and overall inflation—though slowing—is relatively in-line with expectations, the ongoing domestic (and global) manufacturing contraction continues to weigh on the ...

Fireside Charts: A Closer Look at Last Week's GDP and Jobs Reports

November 4, 2019

The S&P closed at another all-time high on Friday (that's three new records set in a single week, by the way), thanks in large part to last week's surprise GDP and jobs reports. Today, we take a closer look at the details:

 

  • Consumer spending is still the primary driver of the current expansion, and surpassed expectations despite a >1% decline from Q2. 
  • ...

Fireside Charts: GDP, Earnings, Jobs, and Other Measures Exceeding Expectations

November 1, 2019

Happy Friday, Fireside Charts readers! We hope you all had a happy and safe Halloween, with plenty of candy to show for your trick-or-treating efforts. Now let's shake off the sugar comas and take a look at the data: Wednesday's rate cut wasn't much of a surprise, so most of the chatter around the announcement has focused on the implication that the committee may be eyeing the pause button... and market expectations for a fourth cut this year adjusted accordingly. Could the surprise out-performance from GDP (0.3% above expectations) and today's

Fireside Charts: 73% of Companies Beat Earnings Estimates, Small Business Job Growth Disappoints, and China Crude Imports Outpace Demand

October 30, 2019

It's Fed day! Whether the third consecutive interest rate cut happens this afternoon or not, the announcement will likely be sharing column inches with today's other big release: Q3 GDP growth. 1.9% ain't too shabby! Check back in on Friday for more post-game analysis. In the meantime... 73% of companies came in above earnings estimates this quarter (the highest percentage since 2006), but this rising tide didn't lift all boats—many ...

Fireside Charts: U.S. Deficit Soars 26% to 7-year High, Fed Expansion Tops $199 Billion, and USD Reverses Negative Trend

October 28, 2019

Warning: the latest federal deficit figure may leave you with sticker shock. The deficit surged 26% in fiscal 2019 to hit $984 billion, the highest point since we topped $1 trillion in 2012. This figure, in addition to the earnings that continue to roll in (heavyweights reporting this week include Alphabet, Facebook and Apple), will likely be a topic of conversation when the Fed kicks off their October meeting ...

Fireside Charts: CLO Market Continues to Climb, and U.S. Sees Modest Manufacturing Recovery Despite Global Slowdown

October 25, 2019

Earnings news remains mixed as we head into the weekend, with S&P profits dropping only ~1.2% so far—significantly less than the projected 4%+—and economic behemoth Amazon suffering a ~7% after-hours loss after posting its first quarterly profit decline in over two years. Investors remain hungry for returns though (and apparently willing to gamble on riskier assets), which could explain why the risky CLO market has more than doubled in the past ...