Bond market sending recession signal
flipped so that the 2-year is now higher than the benchmark 10-year yield for the first time since June, 2007. Other parts of the curve have already inverted, but traditionally the 2-year to 10-year spread is the most widely watched by market players.
"The bond market is screaming recession...Just take a look at what the U.S. market is doing," said National Alliance's Andrew Brenner. "As I look at the European curve, you're at record lows across the board...I think the key things today were Germany did show a contraction in their GDP, and the Chinese numbers were weaker." Chinese industrial growth hit a 17-year low.
"The yield curve does not necessarily mean there's a recession. A lot will depend on the Fed. And as I have argued the Fed has raised rates too much," said Joseph LaVorgna, Natixis chief economist, Americas. "Mr. Powell should act more aggressively to respond to this inversion. The sooner they act, the better. A yield curve inversion now is telling you a recession is probably eight quarters away.
Strategists at BMO, said it's clear that the market is viewing the Fed as behind the curve because of the fact that the 3-month bill yield has been higher than the 10-year yield since the Fed cut rates last month. The Fed ended its rate hiking cycle after its December hike. It then stayed on hold for months, and finally cut rates for the first time since the financial crisis at the end of July.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Bond market close to sending biggest recession signal yetThe bond market could soon send its loudest recession warning yet, if the closely watched 10-year yield falls below the 2-year note yield.
Read more »
Dow drops 390 points and slips back below 26,000 as bond yields declineAll 3 major U.S. indices fell today as bond yields continued to spiral lower, raising concerns about the broader state of the economy. The Dow tumbled 1.51% as the S&P fell 1.24% and the Nasdaq dropped 1.20%.
Read more »
Falling Bond Yields Make Equities Hard to IgnoreNearly 60% of equities in the S&P 500 offer a dividend yield of at least 1.7%, better than the yield on the benchmark 10-year U.S. Treasury.
Read more »
What to watch today: Sinking bond yields, canceled Hong Kong flights, and possible no-deal BrexitU.S. stock futures are trading lower ahead of the Tuesday session, following a sharp sell-off for the second consecutive day on Monday.
Read more »
The last time the bond market did this, it was a buy signal for stocksThe bond market is making historic moves, and Ari Wald of Oppenheimer says it could be flashing a buy signal to equities.
Read more »
Inside Taylor Swift's Tight Bond With Her ParentsAn Andrea Swift appreciation post and an article that will make you want to call your Momma. ❤️ Here's why 'nothing else matters' amid Taylor Swift's mom's 2nd battle with cancer.
Read more »