Posted on 12/10/2018 8:31:55 AM PST by SeekAndFind
What drove down US stocks this week? The answer may be the US bond market and what the shape of the yield curve is - or isn't - telling us about the state of the economy.
For most of 2018, the US yield curve has been flattening. This happens when the gap between short- and longer-dated yields narrows, historically a sign that economic growth may be slowing.
On Tuesday, a section of the curve briefly inverted, with the yield on the five-year US Treasury note falling slightly below that on the two-year note. That helped spark a 3.2% decline in the S&P 500.
The more closely watched gap between the 2- and 10-year notes was hovering at just 12 basis points, its narrowest gap since 2007. An inversion of that section of the curve, with 10-year yields falling below 2-year yields, has preceded every recession since the mid-1970s. So it's understandable why flattening yield curves cause investors to pay attention.
Current circumstances have only heightened investor concerns. The US is in one of its longest macroeconomic expansions in post-war history, and investors are growing increasingly wary that it may end soon. US growth has probably peaked this year and is expected to slow in 2019.
Meanwhile, increasing labor costs are pushing up inflation, triggering concerns that additional interest-rate hikes from the Federal Reserve could soon put an end to the current economic cycle.
Here's something to keep in mind, though. While the US has never had a recession that wasn't preceded by an inverted yield curve, not every curve inversion has been followed by a recession.
(Excerpt) Read more at seekingalpha.com ...
After 2 years the economy began to boom. I give credit to President Trump and especially his policies. I don’t believe anyone can deny that. What would happen if Trump’s enemies got their way and forced him out of office? Good Bye to our thriving economy. I believe that TDS is causing the decline in the market. I believe there are people in our government who will do ANYTHING to get their power back. There are always unintended consequences. Seems the left, especially the news media, cannot get over the fact that Hillary lost - and when she did they lost their power. If they help our President to fail, so goes our country.
Yeah. I moved to south central KY in 2011 to a home I purchased two weeks before the 2008 election (on a handshake). It’s still worth about what I paid for it, which is about what it was worth ten years before I bought it. They don’t have the wild price changes out here. That’s good. I don’t own it as an investment. I own it as a place to live. I expect to live here until I die, or enter a nursing home, whichever comes first.
Run, run, run away the sky is falling.
Or, is it my hair is on fire.
Just don’t know anymore.
Think I’ll just panic for the hell of it.
Bull$hit. These “financial analysts” have no more idea about the future than I do. When their words turn out to be false, nobody remembers them.
Yup,
The left will topple anything and do anything to regain/stay in power.
Markets dont matter environment dont matter people dont matter.
This is veeeeeery interesting for me ... I’m moving all my IRA assets back into the market next month. A decline, or mini-correction, in the market would be to my advantage.
IMO, I wouldn’t be surprised if george soros and/or other lefty billionaires are manipulating the markets.
Because it was just one very long one.
Seeking alpha has caused more faint hearts than Karen McDougal.
I understand that. Don’t you know they will do what they can to hurt the economy which will be a negative for Trump?
You’re right. a little temporary pain wouldn’t bother them a bit.
Absolutely. They will do anything and everything. With deep pockets scumbags like Soros and Bloomberg, there’s lots of stuff that can be manipulated in the markets that would produce results that would terrify the masses concerned with their 401-k’s. Add to the mix certain foreign governments with lots of financial clout who add to the mix and I am amazed that things are as good as they are.
The US economy is seriously out of balance: Stock values are rising, but can be worth -0- tomorrow; cash/interest on savings are less than 1%, but will never be worth less than the principal. Savings rates should be at least 6% to provide the economy with real money, rather than fiat money to feed the stock market.
“..... and I am amazed that things are as good as they are”.
Same here. Another concern is if they start to target every day conservatives’ banking, pensions, etc. We can put nothing past the evil bastards.
Oh, it’s coming probably sooner than we think. Just the old “What do we want?” “What choo got!!” “When do we want it?” “NOW!!!” The more of their blood on the streets as soon as it starts, the better off we’ll be.
Presently, the 30 year is 23 basis points higher than the short term.
SELL! SELL! Wait. BUY! BUY!
In the mean time listen and watch this and sing along with
Louis Armstrong - What A Wonderful World [HQ]
8,857,701 views
What A Wonderful World: Lyrics
I see trees of green, red roses too
I see them bloom for me and you
And I think to myself what a wonderful world
I see skies of blue and clouds of white
The bright blessed day, the dark sacred night
And I think to myself what a wonderful world
The colors of the rainbow so pretty in the sky
Are also on the faces of people going by
I see friends shaking hands saying how do you do
They’re really saying I love you
I hear babies crying, I watch them grow
They’ll learn much more than I’ll never know
And I think to myself what a wonderful world
Yes I think to myself what a wonderful world!
https://www.youtube.com/watch?v=21LGv8Cf0us
Looks like you plagiarized your reply from Politically Incorrect’s post from Chill LoL. Come up with some original thoughts newbie!
Looks like your not interested in the topic and only waste your time scanning posts.
Your source and plagiarism assertions are incorrect
Looks like you are a raving idiot.
Nothing to add to the topic than move a long as not only is the yield curve slightly inverted so is your frigen brain.
So long “Newbie”
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