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Saturday, August 06, 2022

Stock Market & Interest Rate Update for August

As of Friday's close, the Nasdaq and Russell 2000 small cap indexes remain in bear markets while the S&P 500 and DJIA have rallied off bear market lows back into "correction" territory.


S&P 500 Components YTD by Market Cap 
(bigger boxes have bigger market caps)

Central banks raised short term interest rates to try and tame soaring inflation (9.1% for the US in June!)  The 10-year Treasury yields have also risen:

10-year yields vs time for the US, the UK, Japan & Germany

With negative GDP in Q1 and Q2 of 2022, was the first half of 2022 a mild, "technical recession?"  See what others say about this question on my Facebook "Investing for the Long Term" Facebook group.

The 30-year to 1-year yield curve suggests we might have a recession in the future:

US Treasury Yield Curve for 30-Yr minus 1-Yr rates

and the 10-yr to 3-month is getting close to giving that signal:

US Treasury Yield Curve for 10-Yr minus 3-Mo rates vs. S&P 500


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