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Fireside Charts: Acceleration of Stock Buybacks, Latin America's Countries Falter Socially and Financially, Rate Cuts in Europe

June 19, 2019

In today's chart blog, we dive into the net purchases of stocks from 2014 to 2018. The accelerating pace of stock buybacks has made corporations the largest sole  net purchaser of stocks for the last several years. The Empire Manufacturing Index showed factory sentiment lowering by -8.6%. Meanwhile, we are in the midst of the largest increase in commercial debt on record. Between the economic and social turmoil of Venezuela and other Latin American countries, the entire continent is suffering. Lastly, in Mario Draghi's final weeks of his ...

Fireside Charts: Longest Bull Market on Record Continues, U.S. Farmers Giving Up, and China's Growth Far Below Target

June 17, 2019

Ready for a pulse-check on the current bull market in the U.S.? It has lasted nearly 3,750 days, surpassing every other previous bull run. Some domestic farmers are giving up on this year's corn planting altogether, which is causing corn futures to soar. The next round of US tariffs will put China's growth well below Beijing's target range. The negative trend still remains for U.S. manufacturing as U.S. consumer prices barely rise. Finally, industrial production is another negatively affected indicator in China. 

Fireside Charts: Information Technology Rebounds, CPI is Muted, High Oil Inventories Put Pressure on Prices

June 14, 2019

Happy Friday to our Fireside Charts readers! On this day 33 years ago, Standard & Poor's (S&P) began disseminating S&P 500 index values once every 15 seconds. The market values of the three largest companies in the United States (Microsoft, Apple, and Amazon) have grown in June. This contributes the S&P 500 information-technology sector rebounding nearly 9% in the past six sessions and the technology sector being up 24% for the year. The U.S. CPI report is benign for now, and higher wage growth is not feeding through to ...

Fireside Charts: FED Has Room to Cut Interest Rates, Fair Pricing of Market is Questionable, the Consequences of Tariffs

June 12, 2019

According to our first chart today, the U.S. Federal Reserve has exceptionally more room to cut rates compared to its developed market peers. U.S. firms better show robust earnings in the coming quarters because there isn't a great deal of room for multiple expansion. This begs the question, are stocks fairly priced? The trade war has nasty consequences, such as slowing of growth in manufacturing payrolls. The PPI was a bit softer than expected in May. In China, the PPI also slowed. 

Fireside Charts: Interest Rate Cut Probability up to 80%, A Weakening Dollar, and Mixed Industrial Production Results in Europe

June 10, 2019

The Fed is indicating that a rate cut is coming and the U.S. dollar is showing signs of weakening. The probability of a rate cute before July's Federal Open Market Committee leaped to over 80%. But is the market too aggressive in its pricing of Fed rate cuts? Germany's April industrial production report was disappointing and now back in negative territory year-over-year while French industrial production is holding up (for now). Finally, the 10 year UST yield is back at its 2017 bottom. Where will it go from ...

Fireside Charts: A Weak Jobs Report, EPS outlook, and will the FED be our Knight in Shining Armor?

June 7, 2019

Economists predicted to see 180,000 jobs added in May, but the report came in at a dismal 75,000. Unemployment is still at 3.6%. Now it's a matter of when, not if, the FED will move to cut interest rates. We are seeing the formerly resilient job market being affected by the same factors (read: the trade war) hurting other areas of the U.S. economy.  Meanwhile, treasury yields continue to fall sharply. Today in the blog, we cover everything from jobs to the trade war to cell phones and productivity. Wishing you a safe and happy weekend! 

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Fireside Charts: 70% of No Recession in the Next 12 months from NY FED, Global Manufacturing in Contraction Mode, FED Easing During Trade War

June 5, 2019

The Mega Millions jackpot has climbed higher yet again. The top prize is now $530 million. However, you may not need to rush out and test your numbers on this jackpot... the NY Fed's yield-curve model is putting the probability of a recession in 12 months at 30%. Global manufacturing is in contraction mode, with the weakness driven by advanced economies. Our northern neighbor Canada is unfortunately in that category, and has entered a manufacturing recession.  Will a rate cut from the FED keep the bull market going? It will be a challenge to turn the ...

Fireside Charts: The Trade War Continues, Bond Market Strength Holds, and the Possibility of a Recession in Nine Months

June 3, 2019

Will you be watching Jeopardy tonight? James Holzhauer is less than $59,000 from breaking the 2004 record for most money won on the show. Meanwhile, the trade war rages on, leaving a wake of job cuts in its path. Next, will 10 Year U.S. Treasury Yields soon reach the lows of 2012 and 2016? The bond market is holding on to its strength while the FED takes advantage of prices by selling nearly $9 billion of its assets. Lastly, a look at where we are in the business cycle— 

Fireside Charts: The Dollar Rises Higher, a Trade War With Europe Looms, Tension Heightens Between the U.S. and Mexico

May 31, 2019

Before we dive into the latest global trade and international relations developments, we take a look at the U.S. dollar, which continues to rise. New fronts have arisen in the U.S. trade war. Trump is imposing 5% tariffs on Mexico in an attempt to slow the migration of illegal immigrants across U.S. borders. How will Mexico retaliate? 67% of U.S. imports from Mexico are intra-company trade. In other frightening scenarios, if the U.S. launches a trade war with the EU, Germany's job market could deteriorate rapidly. If this ...

Fireside Charts: S&P 500 Earnings Expectations, U.S. Federal Government Mandatory Spending will Overwhelm Revenue, Chinese Banks Expose Skeletons in the Closet

May 29, 2019

The latest in 2019 S&P 500 earnings predictions is not a healthy earnings outlook. Yet, U.S. consumer confidence is at a multi-year high. U.S. grains picked up in the latest percentage change for commodities like gold, crude oil, and copper. The U.S. federal government's interest expense and mandatory spending will overwhelm revenue around 2030. The bond curve has gotten steeper just in one week. Finally, China's first bank seizure in 20 years spooks investors as over 10% of banks are deemed risky in the People's Bank of China ...