monthly market update decade review

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


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


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


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


61

Everybody’s a Winner!


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

https://www.visualcapitalist.com/wp-content/uploads/2019/08/top-100-websites-ranking.html


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!


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

an investment strategy or investment product and is not a solicitation to buy and/or an offer to sell securities. It does not take into

account any investor’s particular investment objectives, strategies, tax status, or investment horizons. All material has been

obtained from sources believed to be reliable, but we make no representation or warranty as to its accuracy and you should not

place any reliance on this information. Past performance is no guarantee of future results.

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

respect to the purchase or sale of any security. All herein listed securities are subject to availability and change in price. Past

performance is not indicative of future results, while changes in any assumptions may have a material effect on projected results.

Ratings on all securities are subject to change.

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