Record Highs and Lows from the Trade Deficit, Population Growth, and Coupon Treasury Issuance
April 9, 2021 | FIRESIDE CHARTS
Consumer confidence is recovering in the U.S. and it’s showing up in spending… just not necessarily on American-made goods. The trade deficit climbed to another record high in March, and it could put pressure on the dollar. U.S. population growth on the other hand just hit a record low in what could prove a headwind for economic growth. One more record? Monthly Treasury note and bond issuance soared to $372 billion this year as the Fed works to fund unprecedented government spending. Surveys show Americans have largely directed their stimulus checks toward savings accounts—aka potential dry powder—and paying down debt, hopefully helping them avoid climbing credit card rates. Meanwhile, are equities overbought (and not just by the corporations that issued them)?
1. Has the U.S. “lost” the trade war? Our deficit hit a new record last month:
Source: The Daily Shot, from 4/8/21
2. …And it is not all China:
Source: The Daily Shot, from 4/8/21
3. Have the rise in interest rates allowed the USD to defy gravity?
Source: The Daily Shot, from 4/9/21
4. Slowing population growth is a headwind for the economy. Children are expensive (food, shelter, clothing, sports/toys, education, vacations, etc.) and drive consumption.
Source: Oxford Economics/ Haver Analytics, from 4/9/21
5. This is how we are paying for the trillions in stimulus:
Source: Federal Reserve, from 4/8/21
6. Politics aside, the latest stimulus package only saw 25% injected into the economy. The question becomes: Will the American consumer spend more of the unspent 75% as the vaccinations end the Pandemic or was it just a gift?
Source: Federal Reserve Bank of New York, from 4/9/21
7. Understanding that banks need to account for defaults and make a profit, the 10-year UST yields are around 1.6% yet banks can charge 10 times this?
Source: The Daily Shot, from 4/8/21
8. Would the markets benefit from a rest?
Source: The Daily Shot, from 4/8/21
9. When CEOs are largely compensated to simply raise share price, the easy path is to use cash flows to buy back stock. CAPEX and investment in the future has been lagging…
Source: The Daily Shot, from 4/8/21
10. Europe’s Purchasing Managers Index has joined most major economies in growth mode:
Source: The Daily Shot, from 4/8/21
11. Higher energy prices, supply bottlenecks (Suez, chips) and pent-up demand are driving the cost of goods sold higher across the globe:
Source: HIS Markit, from 4/9/21
12. Similar to the U.S. and Europe, China’s PPI is also rising.
Source: The Daily Shot, from 4/9/21
13. Contrary to some political pundits, Covid deaths may be significantly under-reported across the globe:
Source: The Daily Shot, from 4/9/21
14. The vaccine race is on! Stay vigilant and safe just a bit longer so we all can beat this…
Source: The Daily Shot, from 4/9/21
Disclosure: The charts and infographics 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 they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.