Typically an inversion of the yield curve signals a bear market between 2-12 months in advance. With inflation knocking at the doorstep and still pitiful economic data, the 10y treasury note is tumbling in value pushing yields and the yield curve back to normalcy but the recovery in yields has gone completely parabolic.
With speculation reaching new extremes and...
Rising long term interest rates and low short term rates are very good. Espacially for banks, because they can make profit with it.
Selling longterm credits with higher interest rates and refinance them short term on the market.
Its their business... So it should be now a good idea to invest in bank sectors.
This was the first chart that signaled a recession in April of 2020 when the curve first inverted last year in May. This was pure luck, by simply drawing a fractal of previous yield curve inversions from past recessions from May, which was around 360 days from the TA that suggested the market would recess in April of 2020. Obviously covid is a...
Looking at the TVC:US10Y - TVC:US03MY and the AMEX:SPY it seems that during a recession like this TVC:US10Y - TVC:US03MY should rise and AMEX:SPY should fall.
Will it be the case this time as well or is this time different?
Maybe the FED cannot allow TVC:US10Y to rise this time due to the amount of debt and will instead impose yield curve control...
A measure of the Ted-spread using LIBOR based Eurodollar futures and 3 month US treasury bill rate.
Higher Ted-spread signals stress in the interbank market (shadow-market), and is not a healthy sign with regards to liquidty.
May of last year, I predicted 10-12 months before the inversion would match the time-frame of inversion and un-inversion seen back in 08. Obviously, the catalyst I did not predict, but the underlying fundamentals were there and 12 months later, we are yet to technically be in a recession. Keep in mind, we need 8 months of data to print for GDP until the quants and...
Hope this idea will inspire some of you !
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This chart gives the relationship between Yield Curve (10Year - 3Month treasury rates) Vs SPY. The yield curve is considered to be one of the predictors of recessions. Recent US recessions are also marked in the chart.
FRED:FEDFUNDS 01:37:23 (UTC)
Fri Jan 3, 2020
This is not financial advice. I am not a licensed financial advisor. Seek a licensed financial advisor before making any investment decisions. I am not responsible for losses or gains that may or may...