This week's volatility captured in charts: the S&P continues to converge with global losses, junk bond yields are on the rise, and smart money might be on the move. An interesting look at what happens when markets outrun the Fed's expectations. Finally, US farmers are still taking the brunt of this ongoing trade war.
1. The U.S. is not on an island, and the divergence versus the rest of the world is ending...
Source: WSJ Daily Shot, As of 10/25/18
2. Is the "smart money" getting out?
Source: Bank of America Merrill Lynch, As of 10/26/18
3. Yet retail investors have limited "dry powder"
Source: Schwab, Bloomberg, As of 10/26/18
4. This is a great "canary" to watch...if junk bond yields rise precipitously, historically, it will not bode well for stocks.
Source: WSJ Daily Shot, As of 10/25/18
5. So who exactly is going to buy all our government bonds? (~$9 trillion this year....)
Source: US Treasury Department, As of 10/25/18
6. A great look at the relative size of the global bond financing needs...
Source: Deutsche Bank, As of 10/25/18
7. Interesting observation...
Source: WSJ Daily Shot, As of 10/26/18
8. The markets focus on future earnings...are the 2019 estimates too optimistic?
Source: WSJ Daily Shot, As of 10/26/18
9. There has been a change in momentum for capital goods orders here at home
Source: WSJ Daily Shot, As of 10/26/18
10. Dollar strength and Yuan weakness has contributed to the trade deficit widening for the fourth month in a row.
Source: WSJ Daily Shot, As of 10/26/18
11. The Yuan is now much lower than it was after they officially devalued in August of 2015.
Source: WSJ Daily Shot, As of 10/26/18
12. The U.S. farmer is still taking the brunt of the trade war...
Last month, the S&P 500 stock index realigned its sector lineup, affecting the technology and telecommunications sectors significantly. Read more on BCM's perspective on this major change in US News and World Report:
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.
