Markets are notorious for exaggerated expectations. They sense a tiger when all they see is a cat. Expectations on rate cuts have been no different. Despite the Fed’s speak on measured changes to policy rates, markets got ahead of themselves since late last year. Markets are now starting to align their expectations with reality.
US economic data from January...
This will be the 2 questions we will be discussing today
1. So, what is happening on this divergence and its implication?
2. And who is leading who?
a. Large cap leading the mid-to-small cap market? Or
b. The mid-to-small cap leading the large cap market?
The answer: The mid-to-small cap is leading the large cap market and why is it so?
If...
When the yield of the 3-month bond is higher than the 30-year bond yield, this is known as an inverted yield curve. It is a rare and unusual occurrence and we are seeing this today. This signals a potential economic recession in the future.
An inverted yield curve suggests that investors have a pessimistic outlook for the future of the economy. They are willing...
Bank run crisis causes the current Fed fund rate to trade higher than the rest of the bond yields, what is its implication?
As US CPI remain high, global equities will continue to be uncertain this year. Investors are now turning their attention to precious metals.
Gold has started to move up since year 2000, it has appreciated more than 700%. However, the...
One of the reasons US Treasuries, and other bonds, have been selling off is the dumping by Japanese investors.
All duration #YIELDS have done well but more so the shorter term. The Inverted Yield Curve has widened over the last few months but has been significantly lately.
However, today we see the 1 & 10Yr ($TNX) selling off but the 2 Yr is CRATERING!...
A number of news sources reported in the lat 2 days that J Powell's favorite yield curve as a recession indicator is an inverted 3 month and 10 year.
These are now inverted and have only inverted 3 other times according to this data
Before the 2000 crash
Before the Global Financial Crisis
Before Covid lockdowns
Its virtually assured at this point...
CBOT: Micro 10-Year Yield ( CBOT_MINI:10Y1! )
Last Friday, U.S. stocks plunged again as soaring interest rates and FX market turmoil fueled investor fears of a global recession.
The Dow fell below 30,000 and closed at 29,590, down 486 or -1.6%. S&P 500 broke through 3700 and settled at 3,697, down 1.72%. Nasdaq Composite lost nearly 200 points and closed at...
Content:
• Difference between interest rate and yield?
• Why it is important to note of yield curve inversion?
• How to tell when Yields are inverted?
• What is the long-term trend for interest rates and yields
• How to manage a rising yield?
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• ...
With the 2022 recession ever coming closer, more hints that it’s nearing appear. One of those hints include this graph, which shows the 1 year bond surpassing the 4% mark, and it’s more than any other bond. For the first time in more than 15 years, the 1 year bond surpasses 4%. The yield curve has been inverted for more than 1 month, and it’s still inverted. At...
CBOT_MINI:10Y1! CBOT_MINI:2YY1!
The Federal Open Market Committee (FOMC) is scheduled to meet on July 26-27. Market widely expects a 75-basis-points (bps) Fed Funds rate increase, from current target of 1.50%-1.75% to 2.25%-2.50%. The call for a 100-point hike, while still feasible, is weakened after U.S. gasoline price dropped 70 cents per gallon in the past...
The 2/10 treasury yield spread is approaching an inversion.
All of the previous yield curve inversions were associated with catastrophic event many of which stemming out of a fiat monetary system that seems very obviously to be failing.
We are seeing the failing fiat monetary system if we look at the amount of money being created out of thin air by the FED (and...
Widespread economic data reflecting unhealthy market indicating significant risk of total market correction (stagflation/recession)
1. Inflation (CPI, PPI) sharly rising at levels not seen in 4 decades
2. Leading indicator: New Home Sales declining, with increasing housing supply
3. Lagging Indicator: Durable Goods month over month and year over year declined
4....
Green arrows pointing at instances where the Yield Curve is Inverted. Info line shows how many days are in between the yield curve inversion and the beginning of a recession. As you can see, the yield curve inverted again in Aug 2019.
Not a good sign for coming recession indication - it's almost a sure bet now with Coronavirus... and once market agrees it's recession for sure, things get UGLY.
From 10-8-2019 CNBC Article
The father of the yield curve indicator says now is the time to prepare for a recession.
The yield for the 3-month Treasury has been above the 10-year since May, a condition known as an inverted yield curve that has predicted the past seven recessions.
“This is the time where you need to reflect upon your strategy."
“It’s way...
