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 olive branches and goodwill gestures to make any meaningful long-term impact? Australia, at least, is reaping the benefits of a U.S./China standoff as their surging exports to China have contributed to the nation reaching a record trade surplus. And there may be some more good news, as the 10-year UST yield has dropped below Financials' dividend yield, which historically has dramatically increased the probability of the sector outperforming over the next 12 months. We’ll be keeping our eyes open to see if that trend continues.
1. When fear becomes reality...
Source: Financial Times, as of 9/11/19
2. We are not sure if this is a trade war weapon, casualty, or a little of both...
Source: WSJ Daily Shot, as of 9/10/19
3. A great depiction of how currency can be used in a trade war... will the Yuan continue to sink against the USD?
Source: Nordea Markets, as of 9/10/19
4. Resource rich economies can buck the global trend...
Source: WSJ Daily Shot, as of 9/10/19
5. Good news for the Financial Sector?
Source: Fidelity Investments, as of 8/31/19
6. Is the over-extended bond market beginning to correct?
Source: WSJ Daily Shot, as of 9/11/19
7. Has the bottom been put in place for global bond yields? Germany's 30 year yield just turned positive.
Source: WSJ Daily Shot, as of 9/10/19
8. Here is a bipartisan topic that Washington should pounce on!
Source: WSJ Daily Shot, as of 9/11/19
9. And screen time does not replace our need to interact socially.
Source: WSJ Daily Shot, as of 8/2/19
Halloween may not be until October, but many investors get spooked early each year by the idea of "September Losses." But is that fear justified? Click below to read our piece "Debunking Some Bunk... Is September Really That Bad a Month?" by BCM Portfolio Manager and Managing Partner Dave Haviland for his perspective. It may help put some of your fears to rest!
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.
