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A Bird's Eye View Blog

Fireside Charts: Trade Deficit Deepens, Trade War Spreads to Other Areas of our Economy, Credit Card Crisis

By:BCM Investment Team | Date:May20, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

Starting today, Mexico and Canada have begun the process to lift the retaliatory tariffs they had imposed on several American goods, including agricultural products. Yet, as of the end of April, our 12-month trailing trade deficit amounted to -$0.9244 trillion and little to no progress has been made with our nation's trade war with China as net U.S. Treasury purchases post largest negative since 2016. Conversely, across the East China Sea, the perceived "safe haven" status of Japan is showing up in their latest GDP figures. In other news, the yield curve inversion continues to widen, the U.S. has been under-building homes for a while, and credit card accounts assessed interest rates hit the highest level in decades.

 

1. An update to our trade deficit...

 

5.20 chart 2-1
 Source: Thechartstore.com, as of 5/20/19

 

    

2. Few realize that a trade war can spread to many other areas...


Source: Twitter, as of 5/20/19

 

  

3. ....China has been selling its UST holdings...

 

5.20 chart 7

Source: WSJ Daily Shot, as of 5/14/19

 

 

4. Is the perceived safe haven status of Japan paying dividends?

 

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

 

 

5. The yield curve inversion is widening...

 

Source: Thechartstore.com, as of 5/20/19

   

 

6. Without robust housing completions, will it be too hard for the U.S. economy to grow beyond the low single digits?

 

 

 Source: U.S. Census, as of 5/20/19

 

  

7. Those with balances are paying for the cash rebates and other perks we all receive.  Oh, and the banks are making~17%, while they have to pay a fraction of this...

 

 

 Source: Federal Reserve, as of 5/17/19

  

    

With the consistent ariff speak on Twitter, in mainstream media, and on Capitol Hill, we are curious to see how tariffs may alter the way the U.S. consumer approaches their financial habits. If the president moves ahead with 25% tariffs on everything China exports to the United States, it could possibly amount to a tax hike of more than $2,000 on the average American family. How would that change affect you and your family? 

 

Read our Investment Losses piece on what risk means to you as an investor, and how to theorize and digest losses in terms of investment returns, time, and dollars below. 

 

Full Post: Investment Losses

 

 

 

 

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.