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A Bird's Eye View Blog

Fireside Charts: Threatened vs. Imposed Tariffs, the Plight of the U.S. Farmer, U.K. Policy Rates at their Lowest

By:BCM Investment Team | Date:May22, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

The U.S. dollar is inching higher, but this trend tends to have a negative impact on manufacturing, stock performance, and emerging markets. Have you ever wondered how the market performed in the months prior to a recession? Next, we share a nice visual summary of the proportion of U.S. imported goods impacted by existing/potential tariffs. Agriculture has been among the U.S. economic sectors hit hardest by the yearlong trade conflict with China. See which kind of farmers they have hit the most. The Bank of Japan now owns over three-quarters of its nation's equity ETFs. Finally, UK's rates are at their lowest going back to the 1700s.

 

1. The USD keeps grinding higher...

 

 

Source: WSJ Daily Shot, as of 5/20/19

 

 

2. So, who knows if, and when, the next recession will be?

 

5.22 chart 4

 Source: WSJ Daily Shot, as of 5/21/19

 

 

3. The consensus is that 2019 earnings will look nothing like 2018's earnings. Are stocks priced to perfection?

 Source: LPL Research, as of 5/22/19

 

 

4. A nice visual summary. 



Source: Goldman Sachs, as of 5/21/19

 

  

5. A graphic that reminds us of the plight of the U.S. farmer...

 

 

Source: WSJ Daily Shot, as of 5/21/19

 

  

6. This is, at least in part, what Chairman Powell was speaking to yesterday. However, with rates recently at historic lows, U.S. corporations taking advantage of the low rates make sense...

 

5.22 chart 5

Source: Cantor Fitzgerald, as of 5/21/19

   

 

7. This is a major reason the USD keeps climbing; our main economic competitors like Europe and Japan have negative yields on their 10 year paper while we have yields~2.5% higher.

 

 

Source: Bloomberg, as of 5/21/19

 

  

8. Can you imagine if the FED owned 3/4s of the U.S. ETFs?!

 

 

 Source: FactSet, as of 5/22/19

 

 

9. Will the current state of the banking system in Europe "force" the ECB to continue or start new QE?

 

 

 Source: FactSet, as of 5/21/19

  

 

10. Since industrialization essentially started in the UK, a look back at historical rates...and note the current rates are the lowest ever.

 

 

 Source: Bank of England, as of 5/22/19

  

 

11. This is a large part of why so many small farms are closing...

 

 Source: USDA, as of 5/22/19

 

 

The S&P 500 is up 1% since the massive sell-off last week and has had a remarkable rally since being down 9% in December. But that shouldn’t mean you get complacent with your investments. BCM Portfolio Manager Dave Haviland recognizes there are some "chinks in the armor" in the latest from CNBC's "As the stock market makes a comeback, the bond market flashes a ‘dire’ warning about the economy"

 

CNBC Article featuring   BCM PM Dave Haviland 

 

 

 

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.