"On average, the S&P 500 has returned 2.5% after a yield-curve inversion in the three months after the episode, while it has gained 4.87% in the following six months, 13.48% a year after, 14.73% in the following two years, and 16.41% three years out, according to Dow Jones Market Data"
hummm ... .. S&P going to 1800 first and then new highs. . . .
Excellent article Tim, thanks!
As you know I have been bearish the stk market and also a coming recession
Why I think this way is because this time is different
1: We have a major trade war with china
2: We have china threatening to sell their USA bonds, which they might, if they want to strike a deal with Iran and develop Iran's oil fields
China has always wanted diversity of supply, no matter what that supply may be
China is also investing large amounts of money for food supplies
3: China also wants to break the reserve USD
4: So does Russia and if they can get India on board that is a huge market
If the stk market does break, the Fed will be forced into QE, which would help the stk market
Unfortunately with int rates at zero, and Russia and china hoarding huge supplies of gold, gold might become money
Minus 1: If so then QE will simply cause huge inflation, which would help the stk market
???: We know the world is heading into recession. What will that do?? but not likely friendly the stk market
5: A bad time for QE if you want to avoid super inflation
If inflation happens, then real assets such as land, gold, income property, food etc. would rise in tandem with inflation. Stks not so much [maybe]
I think this time is different
In my mind the nays out number the yeas re: a rising sttk market
Having said all that my wife takes money out of her tax free portfolio and pays the tax on said portion. The portfolio is keeping steady in value even though she has removed considerable amounts over the yrs. Our portfolio guru continues to amaze me
Thanks for that info! Good read.
so if the fed had not been so slow. or even now, lowered rates this would of been neglected or at least not been a major headline?
https://www.latimes.com/business/story/2019-08-14/stocks-treasuries-yield-invert
The yield on the closely watched 10-year Treasury fell so low Wednesday that, for the first time since 2007, it briefly crossed a threshold that has correctly predicted many past recessions. Weak economic data from Germany and China added to recent signals of a global slowdown.