Monthly Market Update & Decade Review January 2020 Presented by: Rick Phillips, GIOA Founder [email protected] 702-575-6666 January 6, 2020
Monthly Market Update
&
Decade Review
January 2020
Presented by: Rick Phillips, GIOA [email protected] 702-575-6666
January 6, 2020
2Source: Bloomberg, CNBC, FHN Main Street, WSJ
Summary and Economic SignalsSummary for 2020
▪ Fed Going Into Hibernation▪ Global Central Bankers…“Easy Like Sunday Morning”▪ GDP Slowing…U.S. and Globally▪ Recess on Recession…Probably Not the Roaring 20s▪ Rates: Lower for Longer or Lower Forever?▪ Election Year Ahead
3
A First: A Decade Without a Recession
4Source: Bloomberg
GDP: Longest…But Weakest
5Source: Bloomberg
Interesting Decade for GDP
1.8%Est.
2020
6Source: Bloomberg
Concentrated GDP
7Source: Bloomberg
Yield Curve Spread Trended Lower
10Y
3M
Inve
rsio
n
8Source: Bloomberg
Yield Curve Uninverts…Thanks Fed
9Source: Bloomberg, NBER
A New Record To Be Set?
10Source: Bloomberg, Charlie Bilello
Fed’s Balance Sheet
$Tr
illio
ns
11Source: Yahoo Finance, WSJ, Twitter
The Powell Pivot…Fed Hibernating
12Source: Bianco, Hedgeye
Fed’s Projection for Long-Term Fed Funds…Lower, Lower, and Lower
13Source: Bloomberg
Fed Doesn’t Have Much Runway Left
14Source: Bloomberg
Developed World to Remain “Easy Like Sunday Morning”
15Source: Bloomberg, FHN Main Street
Some of the Things Which Caused Rates to Move – 5Yr T-Note
Perc
ent
Brexit
16Source: Bloomberg
Short Rates are Low…But They Were a Bunch Lower
17Source: Bloomberg
The Yield Curve Twist
18Source: Bloomberg, Google
A Merge on the Yield Curve Highway
19
Best Year for Bonds Since 2002
Source: Charlie Bilello
20Source: Bloomberg
Long-Bonds and Junk Did Well
Perc
ent
21Source: Bloomberg
Where are Rates Headed?
22Source: Bloomberg
Oops! Usually Way Too Optimistic About Higher Rates
23Source: Bloomberg
How About You Lend Me Money and You Pay Me to Lend You Money?
24Source: Bloomberg
U.S. Still the “Cleanest Shirt” in the Interest Rate Dirty Laundry
25Source: Bloomberg
Failure to Launch: Global Debt Yields Stuck in Low Gear
26Source: Bianco, Twitter
Never Been Here Before…Highest Long-Term Rate
27Source: Business Insider
Still the Lowest Rates in 5,000 Years!
28Source: Bloomberg
U.S. Government Total Debt and the Debt’s Interest Rate
$Tr
illio
ns
Pe
rce
nt
29Source: USDebtClock.org
A Ticking Time Bomb? Or Will MMT Save Us?
20202008
Debt: $9.6 Tril to $23.2 Tril = +142%
Interest: $241 Bil to $377 Bil = +56%
30Source: Bloomberg
Some of the Things Moving Corporate Spreads Higher
Bas
is P
oin
t Sp
read
to
Tre
asu
ries
European SovereignDebt Crisis
Taper Tantrum
US DebtDowngradeGrowth
Concerns
ChinaSlowdown
Stocks -20%
1-5 Yr Corporates A-AAA
31Source: Bloomberg, through Nov 2019
Fed’s #1 Mandate: U.S. Unemployment Near a 60 Year Low
Perc
ent
2010-2019
3.4% 3.5%
32Source: Bloomberg, Through Dec 2019
Quite the Streak
33Source: Bloomberg
A Decade of Job Growth
34Source: Bloomberg
A Decade of Strong Job Creation…LFP Lower, But It Stabilized
35Source: Bloomberg
Lots of Jobs…A Skills Mismatch?
36Source: dshort.com
The Graying of the U.S. Job Market
37Source: Bianco
College Still Pays Dividends
38Source: Bloomberg
Finally…Some Wage Growth
YOY
Perc
ent
39Source: Yahoo Finance
Minimum Wages Heading Higher
40Source: Bloomberg
Fed’s #2 Mandate: Missed the Mark on Their Inflation Target
Fed’s PCE Core Target
CPI Core
PCE Core
55
41Source: dshort.com
A Long Term Look at Inflation
42Source: Bloomberg
Commodity Prices
Ind
ex V
alu
e
43Source: Bloomberg
Oil Prices
$/B
arre
l
44Source: Bloomberg, Google
U.S. is the World’s Largest Oil Producer
1,0
00
Bar
rels
/Day
12 Million
45Source: Bloomberg
Gold and the Dollar
Go
ld/O
z.
Do
llar
Ind
ex V
alu
e
Gold
Dollar
46
Consumer Confidence has Been Strong
Source: Bloomberg
Ind
ex V
alu
e
47Source: Bloomberg
Existing Home Sales
Mill
ion
s
48
Housing: Major Markets Higher the Past Decade
Source: Charlie Bilello
49Source: Bloomberg
Housing’s Mixed Bag: Biggest Gainer/Biggest Loser (Since Inception)
San Francisco
20 City Index
Las Vegas
Ind
ex V
alu
e
50
Affordable New Homes
Source: realtor.com
51Source: Bloomberg
U.S. Auto Sales Increased…Rangebound Last Few Years
Mill
ion
s
0% Financing
0% Financing
Cash ForClunkers
52Source: Bloomberg
An Excellent Decade for Stocks…In the U.S.
Perc
ent
53Source: Bloomberg
But There Were Some Bumps Along the Way
54Source: dshort.com
But There Were Some Bumps Along the Way #2
55Source: Bloomberg
S&P 500: Decade Best and the Worst
56Source: Bloomberg
Dow: Decade Best and the Worst
57Source: Bloomberg
NASDAQ 100: Decade Best and the Worst
58Source: Bloomberg
Energy Bombed…Tech Boomed
59Source: Bloomberg
S&P 500: Back to Its Winning Ways
60
Global Easy Money Policies “Probably” Helped Stocks
Source: Charlie Bilello
61
Everybody’s a Winner!
Source: Charlie Bilello
62
This Has Never Happened Before
Source: @JeffreyKleintop, Charles Schwab
63
Getting Overvalued?
Source: Bianco
64
Shiller PE Ratio….Getting Overvalued?
65Source: Bloomberg
Record Highs with Low Earnings Growth
66Source: S&P
“Buybacks Have Helped Big Time”
67Source: Bloomberg, CNN, Charlie Bilello
But the Real Decade Winner…Bitcoin!
68Source: Bloomberg, 1/1/20
Bloomberg World Billionaires Index
69Source: WSJ
70
Major Events Each Year
2010: iPad, Obama Care, Dodd-Frank, WikiLeaks, Haiti Earthquake, Chilean Miners Rescued, BP Oil Spill
2011: Japan Quake/Tsunami, Bin Laden Killed, Steve Jobs Dies, S&P AA+, Occupy Wall St., 7 Billion, Royal Wedding
2012: Facebook IPO, Hurricane Sandy, Obama 2nd Term, Dick Clark/Neil Armstrong Dies, Benghazi, Sandy Hook
2013: New Pope, Boston Marathon Bombing, Twitter IPO, US #1 Energy Producer, IRS Scandal, Detroit BKs
2014: Malaysian Flight 370, Ebola, Ukraine/Crimea, Robin Williams Dies, Colorado Pot, Ice Bucket Challenge
2015: Fed’s First Hike, Volkswagen Scandal, SCOTUS Gay Marriage, European Migrant Crisis, Paris Terror Attack
2016: Brexit, Pokemon Go, Wells Fargo Accounts Scandal, Trump Elected, Cubs World Series, Russia Hacking, Pulse
2017: Dow 20K, Amazon/Whole Foods, Solar Eclipse, Harvey/Maria, Tax Cut, #MeToo, Equifax Breach, LV Shooting
2018: California Wildfires, Govt Shutdowns, Parkland Shooting, Kavanaugh, Immigration Crisis, Facebook Scandal
2019: Boeing 737, Hong Kong Protests, Impeachment, Disney+ (Baby Yoda), Trade War, College Admission Scandal
71Source: Google
Influential Products and Companies of the 2010s
72
Google and Facebook Loom Large on the Web
https://www.visualcapitalist.com/wp-content/uploads/2019/08/top-100-websites-ranking.html
73Source: Yahoo Finance
2010s Innovation
74Source: Redbook
Top Grossing Movies Worldwide in the 2010s…Go Disney!
75Source: Playbill
Top Grossing Broadway Plays in the 2010s…Go’ish Disney!
76Source: Yahoo Finance
His Middle Name is “Money” for a Reason
77Source: Google
Gram’s Biggest Names and Most Popular Social Networks
78Source: Business Insider
Most Followed YouTubers
79Source: CNBC, Google
What’s Ahead?
80
Disclosure
The views expressed herein are those of the speaker and do not represent the views of GIOA or FHN Financial Main Street
Advisors, LLC or its affiliates. Views are based on data available at the time of this presentation and are subject to change based
on market and other conditions. We cannot guarantee the accuracy or completeness of any statements or data. The information
provided does not constitute investment advice and it should not be relied upon as such. It is not a solicitation to with respect to
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obtained from sources believed to be reliable, but we make no representation or warranty as to its accuracy and you should not
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Although this information has been obtained from sources which we believe to be reliable, we do not guarantee its accuracy, and
it may be incomplete or condensed. This is for informational purposes only and is not intended as an offer or solicitation with
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