Posted on 01/29/2020 12:45:42 PM PST by SeekAndFind
NEW YORK (Reuters) - A closely watched bond market phenomenon has again flashed yellow, but investors are loathe to give it much weight.
Yields on the 10-year Treasury note briefly fell below those of the 3-month bill early Tuesday for the first time since October, on concerns over the economic impact of the coronavirus. An inverted yield curve has historically been an indicator of looming recession as it tends to reflect worries over future growth among bond investors.
However, worries about the coronavirus have so far done little to shake the upbeat growth views many investors and analysts had going into 2020.
“The state of the U.S. economy seems to be steady as she goes,” said Michael Lorizio, senior fixed income trader at Manulife Asset Management. “To really forecast any chance of near-term recession I think I’d need to see more fundamental support from economic indicators, not just relying on the yield curve.”
Various portions of the Treasury yield curve inverted in 2019 for the first time in years, sparking concerns that a recession may be looming. Some of those worries faded after the Federal Reserve delivered three rate cuts and said it is unlikely to tighten monetary policy in the near future, buoying prices for stocks and boosting investor bullishness: a recent UBS Global Wealth Management survey of high-net worth investors showed that 94% expected positive returns in 2020, while a fund manager poll from Bank of America Merrill Lynch showed stock allocations at their highest level in 17 months.
(Excerpt) Read more at reuters.com ...
Having bombed with Mueller and impeachment, we now turn to our regularly scheduled cheerleading for a recession.
Put differently, the economy is seen as Trump’s strength. Therefore, we must get busy creating the reality that it is bad.
Here’s a real indication of a looming recession. Semi truck sales. The trucking industry is one of the very first hit with slowing sales.
Run Away! Run Away!
This is Obama’s economy. Barry’s fault.
Here’s a real indication of a looming recession. Semi truck sales. The trucking industry is one of the very first hit with slowing sales.
Right now they are doing well.
Yep, it inverted a few months ago, that was one bad recession....
And are sales decreasing?
Not this crap again. Their hope for somehow triggering a recession never dies. But they keep trying.
I almost skipped the last line of his post too. He says the sales are doing well. I don’t know how good or bad that’s an indicator of the economy but it sounds like it would make sense that if that’s doing well the economy is. But what do I know :-)
Yeah, about October, the financial media will be predicting doom. “Re elect Trump and the markets will crash”.
Nothing happened the last time....................
***Run Away! Run Away!***
Run away, Sir Robin.
Not really. Up as compared to two years ago. Down slightly (5%) from a year ago. Trend is slightly lower overall from the peak in Nov 2016.
Didn’t happen last time.
The 3-month vs. 10 year mean absolutely nothing about recessions. Neither does the 2-year vs. 10 year.
The ONLY yield curve that has ever predicted recessions remains the 1 year vs. 10 year CMT. It inverted last spring a few times, and very slightly.
Likely, a recession before the end of next year (2021), as I said almost a year ago. Probably a mild recession since the 1 vs 10 spread wasn’t very large.
Caveat: there is absolutely no reliable economic theory on why this should be so, but it’s never been wrong before. In any event, it need not interfere with the election this year.
Trump’s fault!
Democrats: YES! finally some good news.
Back in 2019, late summer or fall, this horrible event happened, and all the media was repeating “recession” hoping it would happen. It Didn’t! And so, the headline is full of cow pat when it says: “Historically, an indicator of looming recessiob” No it ain’t!
Oh, they really really want a recession!
I think they will invent one. Donald’s numbers won’t go up every month. That is normal. The best baseball players see their numbers go up and down. That is normal. They will sometimes not match their past performance.
The economic numbers don’t always go in the desired direction. What if the employment numbers go in the wrong direction for ONE month? You can sure that the media will go orgasmic over it. I noticed they haven’t been telling us the unemployment numbers, so they must be real good for Trump.
I hate the media.
Well the inverts all cottoned to it quickly
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