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A Bird's Eye View Blog

Fireside Charts: Slowing of COVID-19, Alphabet Soup of Recovery Predictions, Balance Sheet as Percent of GDP

By:BCM Investment Team | Date:May15, 2020 | Category: Equity, Economics, Market Highlights, Fireside Charts

Happy Friday! As we wrap up the week we take a look at some positive news on the COVID-19 front. New cases in most European countries, in addition to China and South Korea, are trending down with one notable exception...will Europe's poster child for "Do Nothing" regret that decision? Here in the U.S., many states are beginning to slow the spread even those that have begun to reopen. Will this prompt the remainder of state governments to begin reopening the economy or will we see more outbreaks, proving its too soon? Given that nearly a quarter of the U.S. workforce has applied for unemployment benefits since the beginning of March, its no mystery why states are pushing to reopen. While some of the "bad news" seems to be slowing, many economists are trying to predict the shape of this recovery using the alphabet...let's just hope the "L-shape" doesn't become reality. Meanwhile, China is experiencing a welcomed reprieve as their industrial production is taking a "V-shape". Now we wonder what will happen with tariffs as both the U.S. and China may benefit from a hiatus. The U.S. balance sheet as a percent of GDP is up to 33% but despite the massive stimulus packages, we are still better off than many regions of the world. At least a high percentage of American's have agreed on one thing... America's favorite sports movie. Which is your favorite? 


1. Many States are beginning to turn the tide!


5.15 begging to turn the tide

Source: WSJ Daily Shot, from 5/14/20



2. Note what is happening in Sweden, often cited as the poster child of do nothing and all will be okay...


5.15 sweden

Source: WSJ Daily Shot, from 5/15/20



3. Almost a quarter of the American work force has applied for unemployment benefits since the beginning of March.


5.15 unemployment

Source: WSJ Daily Shot, from 5/15/20



4. Yet there are signs of the bad news slowing...


5.15 Fed economic index

Source: WSJ Daily Shot, from 5/15/20



5. ...Or even bottoming...


5.15 Johnson redbook

Source: WSJ Daily Shot, from 5/15/20


6. Reality may include several shapes depending on location, economic base and social distancing discipline. A vaccine or cure will also change things for the better!


5.15 recovery Alphabet

Source: WSJ Daily Shot, from 5/14/20



7. Sequence of event risk is real...


5.15 boomer investors-1

Source: WSJ Daily Shot, from 5/15/20



8. More green shoots...


5.15 china industrial production

Source: WSJ Daily Shot, from 5/15/20



9. Suspending these, even for six months, would give a welcome boost to both economies...


5.15 suspending tarrifs

Source: WSJ Daily Shot, from 5/14/20



10. These will increase as GDPs begin to decline...


5.15 GDP decline

Source: WSJ Daily Shot, from 5/15/20



11. The Fed quickly announced plenty of liquidity facilities, but they have been slow to implement them. If they are not needed, this is a good sign!


5.15 giant bridge loan

Source: WSJ Daily Shot, from 5/15/20



12. Happy Friday!


5.15 karate kid

Source: WSJ Daily Shot, from 5/15/20



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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.