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Tuesday, December 04, 2018

US Treasury Yield Curves for 2018 by Kirk

Many blame the stock markets' huge decline today on worries the yield curve (Figure 1) will fully invert. Inverted yield curves often, but not always, precede recessions. Just today the markets fell between 3.1% and 4.4% as Figure 2 below shows.  

Generally the larger the inversion the higher the odds of a recession in the next year.  
Fig 1
Today's Market Action
Fig 2
You can see from the graph above and table below that short term rates are higher than on 9/28/18 while intermediate to long term rates have fallen which is what has to happen before the yield curve inverts.  
Fig 3
A "healthy" yield curve has rates increasing with term from one month to thirty years which we do not have now.

The yield curve is reflecting fear the "Trump Trade War" will push the country into a recession.  
Fig 4
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The Stock markets, as this table shows, are down between 6.7% and 15.0% below their recent, all time peak values with the Russell 2000 small cap index down the most!
Fig 5
Don't miss out on the next buy or sell alert! 

Fig 6
Fig 7
Yield Curve Definition from Wikipedia


Saturday, December 01, 2018

Investors Intelligence Sentiment Data & 2CS vs S&P 500

Investors Intelligence Sentiment : Bulls / (Bulls+Bears) vs S&P 500 11/30/18

Sentiment is down considerably from the record highs it made early in the year when the stock market was at its peak.
 

Chart of Investors Intelligence Sentiment SurveyBulls / (Bulls+Bears) vs S&P500
Click Graphs for Full Size Images
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The 2CS is doing nicely too after another great buy signal

My Last article: New Series I Bond Rates

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