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A Bird's Eye View Blog

Fireside Charts: Unemployment, A Nasdaq Milestone, and Is Inflation Approaching?

By:BCM Investment Team | Date:Apr24, 2020 | Category: Equity, Economics, Market Highlights, Fireside Charts

~4.3 million more Americans filed for unemployment this week, and while that brings the quarantine-era total to ~26 million, inching us closer to a 20% unemployment rate, new claims are trending downward. Unfortunately, so are our manufacturing numbers which have slipped well into contraction territory and are on a path to revisit their financial-crisis lows. Meanwhile, as the Nasdaq's market cap hit a historic milestone, investors are turning a critical eye to companies, their balance sheets (and subsequent preparedness to ride out the lean times), and their credit worthiness. Are more downgrades on the horizon? Inflation may be, as the massive wave of QE just pushed the growth rate of the U.S. broad money supply to its highest point in modern history! And there's more stimulus on the way too; the House passed another $480 billion in coronavirus relief funding yesterday and Congress is already in talks on a Phase 4 deal—where's it all going? Finally, over in China, investors are piling into defensive positions. But with yields on money-market funds falling, is this "flight to safety" all that safe?


1. Would you ever think 4.3 million people losing their jobs in a week was an improvement?


u.s. unemployment

Source: WSJ Daily Shot, from 4/24/20



2. This gives historical perspectives. Unfortunately, it doesn't include the 4.3 million from last week...


historical u.s. unemployment

Source: WSJ Daily Shot, from 4/24/20



3. U.S. manufacturing is approaching the 2009 lows.


markit u.s. manufacturing pmi

Source: WSJ Daily Shot, from 4/24/20



4. For a moment there, the Nasdaq was worth more than the rest of the world's stocks...combined!


nasdaq market cap

Source: WSJ Daily Shot, from 4/22/20



5. Will this crisis bring an active management resurgence? Passive indexing rewards good and bad companies alike, which matters less in a roaring bull market...


company performance by balance sheet

Source: WSJ Daily Shot, from 4/24/20



6. How many companies will be downgraded or worse?


credit ratings

Source: Oxford Economics, as of 4/6/20



7. A harbinger for future inflation?


u.s. broad money supply growth rate

Source: WSJ Daily Shot, from 4/24/20



8. Down, but not out...


u.s. crude production

Source: WSJ Daily Shot, from 4/23/20



9. What's in this week's interim stimulus bill?


new stimulus package

Source: WSJ Daily Shot, from 4/23/20



10. The best intentions do not always become reality...


stimulus payout survey

Source: UBS Research, from 4/22/20



11. As a people, the Chinese are definitely in risk-off mode for the moment.


AUM in chinese mutual funds

Source: WSJ Daily Shot, as of 3/31/20



12. Yet with yields falling, how long will the defensiveness last?


Chinese money market fund yield

Source: WSJ Daily Shot, from 4/23/20



13. Perhaps a more modest stimulus package is playing a role...


stimulus package comparisons global

Source: Financial Times, from 4/23/20



14. Japan's manufacturing numbers were better than most countries...


Markit Japan manufacturing pmi

Source: WSJ Daily Shot, from 4/23/20



15. While data from China may be suspect, if enough testing is done we would see how many people have Covid-19 but show no symptoms.


asymptomatic coronavirus cases

Source: WSJ Daily Shot, from 4/24/20



16. To the entire medical field and all first responders, we can't thank you enough!


frontline medical workers

Source: WSJ Daily Shot, from 4/24/20




Many investors buy “high yielding,” “high dividend” or “dividend achiever” type ETFs/funds expecting a relatively safe and stable yield, but a look back at 2007 shows us that it's not quite that simple. Read "A Caution from 2007: Beware of the Dividend in Your High Dividend ETFs & Funds" by BCM Portfolio Manager Dave Haviland to learn why.


A Caution from 2007






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.