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Fireside Charts: ECB Cuts Rates to Record Lows and Restarts QE — Is the U.S. Far Behind?

September 13, 2019

While QE just officially came to a close in the U.S. on 7/31, the ECB announced yesterday that—in addition to a rate cut to record lows—it will relaunch its easing program in October and continue it for "as long as necessary." Will the Fed follow suit when they meet on Wednesday? More importantly, will these measures be enough to stimulate the slowing domestic and global economies? As we can see in the charts, it can take up to eight months for ...

Fireside Charts: Global Trade Slowdown Flashes Reminder of Financial Crisis and Have We Seen the Bottom for Treasury Yields?

September 11, 2019

While stocks have edged higher off encouraging trade war news this week, as you'll see in the charts below, Chinese investment in the US has plummeted over 80% since 2016, the Yuan has depreciated so significantly that the exchange rate can only exacerbate costs rather than offset them, and world trade as a whole is contracting at the fastest pace in nearly a decade—i.e. since the great recession. Are we in too deep at this point for ...

Fireside Charts: Latest Jobs Report Disappoints, Manufacturing Slowdown Continues, and Gold Continues to Prosper as Many Seek Safety

September 9, 2019

While Friday's jobs report was largely disappointing—the retail, trade, and transportation sectors all saw a more significant net decline of ~11,000 workers in August, and private sector employment expanded at the slowest pace since February—focus is primarily centered on central banks this week. The ECB is expected to cut rates again when they meet on Thursday (moving further into negative territory), and many ...

Fireside Charts: U.S. In For Weak GDP Growth Rate if PMI Remains at Current Levels, And China Faces Mounting Debt

September 6, 2019

While we're pouring over today's jobs report, cap off your Friday with a look at this week's economic trends. The trade war and a decline in exports has led to U.S. businesses suffering "one of the toughest months since the global financial crisis" in August, says Chris Williamson, Chief Economist at IHS Markit. US PMI recorded weak expansion in August, and if it remains at its current levels, we'll be on track for an anemic 1% annualized GDP growth rate. While ...

Fireside Charts: USD Hits 20-Year Highs, EM Currencies Set Record, and the Trade War's Shock to Consumers

September 4, 2019

Let's start with a quick August recap: the Dow Jones Utilities Average dominated last month with a 20.19% 1-year return, emerging market currencies—likely feeling the effects of the trade war and the USD's record strength—suffered their worst August on record, and manufacturing woes continue across the globe. And the outlook for manufacturing and EM currencies may remain bleak, as the new round of 15% tariffs, now expanding into consumer goods, ...

Fireside Charts: Crude Oil Production Surges to Record High, the 10yr TIPS Yield Falls Deeper into Negative Territory, and a Look at What May Be In Store for the U.S. Economy

August 30, 2019

In today's chart blog, we see crude oil production hit a record high, a projected recovery for lagging small caps, and try to catch a glimpse into the future. How long after a 10-2 year yield curve inversion have recessions typically begun, and will the soaring deficit—now expected to top $1 Trillion in 2020, per the CBO—hamstring government intervention when a recession does arrive? Meanwhile, negative-yielding debt continues to expand, and ...

Fireside Charts: World's 5 Largest Economies Now in Manufacturing Recession, EM Currencies Struggling, and the 30-Year Treasury Hits Record Low

August 28, 2019

Manufacturing measures are still top of mind for us today as, while we've seen improvement in some regional prints, the U.S.'s Monday slide into contraction means that the world's five largest economies are now in manufacturing recession. While some, including President Trump, lay blame at the Fed's feet, trade war anxieties seem to be the main topic of discussion. And that conflict, in addition to the Yuan's ongoing decline, is certainly having an effect on emerging markets. EM currencies continue to sink and Mexico's GDP is officially in contraction, ...

Fireside Charts: U.S. Manufacturing in Contraction for First Time in Nearly a Decade, But Markets Show Some Signs of Resilience

August 26, 2019

Amidst all of this summer's volatility and U.S. manufacturing entering contraction, we're seeing resilience in some unexpected arenas. Though it's suffered some losses in recent months and fund flows have been on a steady decline, the S&P 500 is still up nearly 40% over the past three years and we're not yet seeing a sharp rise in investors looking to short. And for all the talk ...

Fireside Charts: A Different Perspective on the Yield Curve Inversion and How This Situation is Unique

August 21, 2019

Everywhere you turn, there's chatter that yield curve inversions are an indicator of impending recession. Since the inversion, many economists and experts have publicly shortened their estimated timelines for when the next recession will hit. Yesterday, President Trump went so far as to confirm that he's considering various tax reductions—i.e. government stimulus—to prop ...

Fireside Charts: Safe Haven Assets Surge as Investors Seek Protection From Market Volatility

August 19, 2019

Investors seem to be piling into safe haven assets as volatility in both the stock and bond markets continues to make headlines this week. A move to treasuries may be risky though as their yields are still hovering around historic lows, despite a small recovery for the 30-year following hints that the U.S. may begin to issue longer-term debt. However, this struggle does not seem to have ...