Last Week: On Wednesday night I got into an Uber and greeted my driver by saying that it was a beautiful evening. “Yes” he responded, “but the 2-10 curve has inverted and there is a recession coming in 18 months”. I’m not joking. That actually happened. The market had suffered its worst decline of the year that day as the yield inversion had triggered a tidal wave of algorithmic generated sell [...]
Last Week: There is much ado about the plummeting interest rate offered by the Ten-Year Treasury. Many experts are interpreting those declining rates at as harbinger of an impending recession. It’s interesting to take note that we have seen this pattern twice before since the Great Recession of 2009. If we add a chart of GDP to this chart, we see that in general the economy has been slowing when the [...]
The S&P 500 Total Return Index gained 4.3% for the quarter and is up 18.5% for the year. The Barclays U.S. Aggregate Bond Index gained 2.4% for the quarter and is up 4.7% for the year. Markets responded to the potential progress in trade negotiations and the likelihood of further interest rate cuts by the Federal Reserve. These issues will continue to be important in the third quarter. In addition, investors [...]
Last Week: The first movement of August 2019 sounded like a reprise of the atonal first stanza of October 2018, with Fed and Trade policies combining to hurt the ears and wallets of investors. On Wednesday the Fed delivered a 25-basis point reduction in the target range for short-term rates, but their statement suggested that the easing of trade tensions reduced the need for further rate cuts. Coincidentally (?) on Thursday [...]