Category: Blog

Market Smell A Recession As Yield Curve Inverts Quant models and yield curve inversion smell of recession rather than mid-cycle Fed eases. Image: J.P. Morgan

WTI Price and Brent Price vs. Oil Inventory Oil inventories suggest that the price of oil is currently fairly priced. Image: Pictet Wealth Management

Brent Price vs. 10-Year Treasury Bond Yield vs. S&P 500 This chart shows that oil prices are a good indicator of global economic growth and investors are concerned about a global economic slowdown. Image: Pictet Wealth Management

Could European Stocks Outperform U.S. Stocks? This chart shows U.S. vs. European stocks at 70-year highs. Keep in mind that investors think that the euro area economy is less resilient than the U.S. economy in the event of a shock. Currently, the euro area economy is more impacted by the global slowdown than the U.S.…

Where Is the Credit Cycle Headed? “Typically, once the horse leaves the barn on the domestic credit cycle, there’s no turning back…” We all know that never ends well. Image: Hedgeye Risk Management LLC

Fear & Greed Index vs. S&P 500 Index This chart shows how optimism stays unusually low. Is this alarming for bears? Image: Cable News Network

New York Fed Probability of Recession in Next 12 Months since 1990 When an inverted yield curve occurs, short-term interest rates exceed long-term rates. It suggests that the long-term economic outlookis poor and that the yields offered by long-term fixed income securities will continue to decline. Since 1962, no recession has occurred without an inverted…

How Does Education Affect the Unemployment Rate? The chart below shows the unemployment rate by education and the importance of education for the unemployed. Image: Ben Casselman

Probability of Fed Rate Cut in July 2019 Probability of Fed rate cut in July 2019 at 77%. Image: Bloomberg

The Great Re-allocation from Equities to Bonds Continues Since the end of 2018, S&P 500 ETFs have seen outflows, while long Treasury ETFs have seen inflows. Image: Macrobond and Nordea

Yield Curve Inversion, How Long Until The Recession? In recent history, once the 10-Year minus 3-Month Treasury yield spread is negative and hits 10 consecutive days, it persists for weeks/months. When an inverted yield curve occurs, short-term interest rates exceed long-term rates. It suggests that the long-term economic outlook is poor and that the yields offered…