The Federal Reserve left interest rates unchanged during its two-day meeting this week and despite heightened pressure from the markets and Trump administration, left the door open to cuts later this year. The word "patient" was dropped from their statement. Now, the market is predicting a 70% probability of three or more rate cuts this year. Which sector has the highest amount of debt outstanding? Meanwhile, equity fund outflows are near record levels. Will slower economic growth finally pull down corporate earnings? Finally, our Dovish Federal Reserve has led to a weaker U.S. dollar while other currencies are rallying.
1. Don't fight the FED, and they are ready to cut in July...
Source: FOMC, as of 6/20/19
2. Are the markets relying on the FED going ultra-dovish? Two or more is now a 95% probability...
Source: Bloomberg, as of 6/19/19
3. How much debt does the U.S. have?
Source: Wells Fargo, as of 6/21/19
4. With the market cap weighted S&P 500 hitting a new high yesterday, the flow data makes one wonder...
Source: Wells Fargo, as of 6/21/19
6. So far, most U.S. company earnings have not been affected by the world's shrinking manufacturing, trade and growth. How long can this continue?
Source: Refinitiv, as of 6/20/19
6. Another big miss from a regional FED survey...
Source: Wells Fargo, as of 6/21/19
7. As the budget debate heats up in Washington, here is the CBO's historical and predictive data.
Source: WSJ Daily Shot, as of 6/18/19
8. What part of $1.5 trillion in student loan debt is hard to understand? Home ownership is too onerous with large student loan debt...
Source: WSJ Daily Shot, as of 6/19/19
9. Negative yielding bonds now total over $12.5 trillion:
Source: Bloomberg, as of 6/20/19
10. Japan fell back into manufacturing contraction (less than 50).
Source: WSJ Daily Shot, as of 6/20/19
11. The Dovish FED has led to a weaker USD and most other currencies are rallying; here is the Japanese Yen:
Source: WSJ Daily Shot, as of 6/19/19
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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.
