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Wall Street's Favorite Recession Indicator Is in a Slump of Its Own

2023-08-04

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Street's Favorite Recession Indicator Is in a Slump of Its Own","url":"https://stock-news.laohu8.com/highlight/detail?id=2438400023","media":"Dow Jones","summary":"One of Wall Street's favorite recession indicators looks broken.An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven't been any glaring false alarms.Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.Bets on cuts could reflect some chance of a recession but also some probability of a benign","content":"<html><head></head><body><p>One of Wall Street&#39;s favorite recession indicators looks broken.</p><p>An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven&#39;t been any glaring false alarms.</p><p>Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.</p><p>If a recession doesn&#39;t materialize soon, it could do lasting damage to the yield curve&#39;s status as a warning system, providing one of the most significant examples of how the fallout from the Covid-19 pandemic has upended longstanding assumptions on Wall Street about how markets and the economy function. Even if the past couple of years have been unusual, investors likely wouldn&#39;t be as worried when another inversion occurs in the future.</p><p>&#34;It&#39;s not working,&#34; said Ed Hyman, chairman of <a href=\"https://laohu8.com/S/EVR\">Evercore</a> ISI. &#34;So far, the economy is doing fine,&#34; though he added that a recession could be just a little late in arriving this time.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/786e45d1c2d03b2df9d3c24d9de727b0\" tg-width=\"722\" tg-height=\"424\"/></p><p><strong>Earning its reputation</strong></p><p>There is a reason yield-curve inversions precede recessions.</p><p>Yields on Treasurys largely reflect investors&#39; expectations for what short-term interest rates set by the Federal Reserve will average over the life of a bond. When longer-term yields fall below short-term yields, it is a sign that investors expect the Fed to cut interest rates -- something it often does to jump-start a faltering economy.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/96ada24e2940cb3f71bedfa62a54cd0a\" tg-width=\"740\" tg-height=\"810\"/></p><p>The near-mythical status of the inverted yield curve as a harbinger of downturns took time to develop. One of the first to put a spotlight on the link between inverted curves and recessions was Campbell Harvey, now a finance professor at Duke University, who published a dissertation on the subject in 1986.</p><p>Inverted yield curves were discussed on Wall Street and at the Fed in the 1990s but remained a relatively niche subject until after the 2008 financial crisis, Harvey said. Then people started taking stock of warning signs they had initially played down.</p><p>Data from Factiva supports that narrative, showing a huge increase in the number of news articles mentioning the yield curve when it inverted in 2019 compared with previous inversions.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7709be57bb0250200ec923eec019ab26\" tg-width=\"741\" tg-height=\"418\"/></p><p><strong>Reasons for doubt</strong></p><p>Still, there have always been limitations to the yield curve as a forecasting tool.</p><p>An inverted curve indicates that investors expect rate cuts, but it doesn&#39;t explain why they are making those wagers.</p><p>Bets on cuts could reflect some chance of a recession but also some probability of a benign scenario, with the Fed trimming rates as a precautionary measure even as growth remains stable.</p><p>Inversions have reflected differing circumstances over the years. In the early 1980s, the Fed was hardly trying to avoid a recession when it raised rates to nearly 20% to fight double-digit inflation.</p><p>In other cases, some economists believe that a recession could have been avoided had it not been for external shocks, such as the surge in oil prices when Iraq invaded Kuwait in 1990 or the Covid-19 pandemic in 2020.</p><p>In the current situation, a recession has at times seemed likely. Forecasts for a downturn surged in 2022 as inflation kept climbing and the Fed started raising rates aggressively.</p><p>Still, some economists remained confident that a recession could be avoided. Inflation, they argued, could fall at least part of the way to the Fed&#39;s 2% target on its own as businesses recovered from the pandemic and were able to boost output to meet customer demand again . Interest-rate increases were still needed but could be reversed before the economy slowed too much.</p><p>Since then, inflation has fallen sharply with only a small uptick in the unemployment rate. The prospect of rate cuts without a recession has cheered investors, helping lift the S&amp;P 500 24% last year and a further 11% this year.</p><p>Harvey, the economist perhaps most associated with the inverted yield curve, has himself argued that the economy could avoid a recession this time.</p><p>&#34;It is naive to think that you can just forecast the complex U.S. economy with a single measure from the bond market,&#34; he said.</p><p><strong>Pushing boundaries</strong></p><p>There is no one definition of an inverted curve.</p><p>Investors on Wall Street tend to focus on the 2-year Treasury note and the 10-year note because those bonds get traded often. Some economists prefer to measure the 10-year yield against the 3-month or 1-year yield.</p><p>There is also the question of when to start a recession watch: Should it be when a part of the yield curve inverts for a day, or for longer than that?</p><p>By several measures, the current wait for a downturn is already pushing up against, or surpassing, any in recent history.</p><p>Since 1968, it has taken from nine to 24 months for a recession to materialize after the start of an inversion in which the 10-year yield fell below the 1-year yield for at least one month.</p><p>By that definition, the latest inversion is about to end its 23rd month. Yet from the start of the inversion through April, the economy has added far more jobs than any comparable period that followed an inversion.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/777500f465c0ed0947d9eb6b6a386952\" tg-width=\"736\" tg-height=\"479\"/></p><p><strong>Growing acceptance</strong></p><p>There is little indication that the inversion will end soon.</p><p>Inversions have often ended shortly before recessions when rate cuts from the Fed came closer into view, leading to a big decline in short-term Treasury yields.</p><p>A few recent economic reports haven&#39;t been as strong as expected. But it will take a lot more for investors to seriously bet on the yield curve un-inverting, given how poorly that wager has worked out over the past year-and-a-half, said Michael Lorizio, senior fixed-income trader at Manulife Investment Management.</p><p>&#34;The curve inversion, especially earlier on in the cycle, played a major role in the psyche for investors,&#34; he said. &#34;But I do think now this has become kind of the new normal.&#34;</p><p></p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Wall Street's Favorite Recession Indicator Is in a Slump of Its Own</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWall Street's Favorite Recession Indicator Is in a Slump of Its Own\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2024-05-29 10:43</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p>One of Wall Street&#39;s favorite recession indicators looks broken.</p><p>An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven&#39;t been any glaring false alarms.</p><p>Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.</p><p>If a recession doesn&#39;t materialize soon, it could do lasting damage to the yield curve&#39;s status as a warning system, providing one of the most significant examples of how the fallout from the Covid-19 pandemic has upended longstanding assumptions on Wall Street about how markets and the economy function. Even if the past couple of years have been unusual, investors likely wouldn&#39;t be as worried when another inversion occurs in the future.</p><p>&#34;It&#39;s not working,&#34; said Ed Hyman, chairman of <a href=\"https://laohu8.com/S/EVR\">Evercore</a> ISI. &#34;So far, the economy is doing fine,&#34; though he added that a recession could be just a little late in arriving this time.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/786e45d1c2d03b2df9d3c24d9de727b0\" tg-width=\"722\" tg-height=\"424\"/></p><p><strong>Earning its reputation</strong></p><p>There is a reason yield-curve inversions precede recessions.</p><p>Yields on Treasurys largely reflect investors&#39; expectations for what short-term interest rates set by the Federal Reserve will average over the life of a bond. When longer-term yields fall below short-term yields, it is a sign that investors expect the Fed to cut interest rates -- something it often does to jump-start a faltering economy.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/96ada24e2940cb3f71bedfa62a54cd0a\" tg-width=\"740\" tg-height=\"810\"/></p><p>The near-mythical status of the inverted yield curve as a harbinger of downturns took time to develop. One of the first to put a spotlight on the link between inverted curves and recessions was Campbell Harvey, now a finance professor at Duke University, who published a dissertation on the subject in 1986.</p><p>Inverted yield curves were discussed on Wall Street and at the Fed in the 1990s but remained a relatively niche subject until after the 2008 financial crisis, Harvey said. Then people started taking stock of warning signs they had initially played down.</p><p>Data from Factiva supports that narrative, showing a huge increase in the number of news articles mentioning the yield curve when it inverted in 2019 compared with previous inversions.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7709be57bb0250200ec923eec019ab26\" tg-width=\"741\" tg-height=\"418\"/></p><p><strong>Reasons for doubt</strong></p><p>Still, there have always been limitations to the yield curve as a forecasting tool.</p><p>An inverted curve indicates that investors expect rate cuts, but it doesn&#39;t explain why they are making those wagers.</p><p>Bets on cuts could reflect some chance of a recession but also some probability of a benign scenario, with the Fed trimming rates as a precautionary measure even as growth remains stable.</p><p>Inversions have reflected differing circumstances over the years. In the early 1980s, the Fed was hardly trying to avoid a recession when it raised rates to nearly 20% to fight double-digit inflation.</p><p>In other cases, some economists believe that a recession could have been avoided had it not been for external shocks, such as the surge in oil prices when Iraq invaded Kuwait in 1990 or the Covid-19 pandemic in 2020.</p><p>In the current situation, a recession has at times seemed likely. Forecasts for a downturn surged in 2022 as inflation kept climbing and the Fed started raising rates aggressively.</p><p>Still, some economists remained confident that a recession could be avoided. Inflation, they argued, could fall at least part of the way to the Fed&#39;s 2% target on its own as businesses recovered from the pandemic and were able to boost output to meet customer demand again . Interest-rate increases were still needed but could be reversed before the economy slowed too much.</p><p>Since then, inflation has fallen sharply with only a small uptick in the unemployment rate. The prospect of rate cuts without a recession has cheered investors, helping lift the S&amp;P 500 24% last year and a further 11% this year.</p><p>Harvey, the economist perhaps most associated with the inverted yield curve, has himself argued that the economy could avoid a recession this time.</p><p>&#34;It is naive to think that you can just forecast the complex U.S. economy with a single measure from the bond market,&#34; he said.</p><p><strong>Pushing boundaries</strong></p><p>There is no one definition of an inverted curve.</p><p>Investors on Wall Street tend to focus on the 2-year Treasury note and the 10-year note because those bonds get traded often. Some economists prefer to measure the 10-year yield against the 3-month or 1-year yield.</p><p>There is also the question of when to start a recession watch: Should it be when a part of the yield curve inverts for a day, or for longer than that?</p><p>By several measures, the current wait for a downturn is already pushing up against, or surpassing, any in recent history.</p><p>Since 1968, it has taken from nine to 24 months for a recession to materialize after the start of an inversion in which the 10-year yield fell below the 1-year yield for at least one month.</p><p>By that definition, the latest inversion is about to end its 23rd month. Yet from the start of the inversion through April, the economy has added far more jobs than any comparable period that followed an inversion.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/777500f465c0ed0947d9eb6b6a386952\" tg-width=\"736\" tg-height=\"479\"/></p><p><strong>Growing acceptance</strong></p><p>There is little indication that the inversion will end soon.</p><p>Inversions have often ended shortly before recessions when rate cuts from the Fed came closer into view, leading to a big decline in short-term Treasury yields.</p><p>A few recent economic reports haven&#39;t been as strong as expected. But it will take a lot more for investors to seriously bet on the yield curve un-inverting, given how poorly that wager has worked out over the past year-and-a-half, said Michael Lorizio, senior fixed-income trader at Manulife Investment Management.</p><p>&#34;The curve inversion, especially earlier on in the cycle, played a major role in the psyche for investors,&#34; he said. &#34;But I do think now this has become kind of the new normal.&#34;</p><p></p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2438400023","content_text":"One of Wall Street's favorite recession indicators looks broken.An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven't been any glaring false alarms.Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.If a recession doesn't materialize soon, it could do lasting damage to the yield curve's status as a warning system, providing one of the most significant examples of how the fallout from the Covid-19 pandemic has upended longstanding assumptions on Wall Street about how markets and the economy function. Even if the past couple of years have been unusual, investors likely wouldn't be as worried when another inversion occurs in the future.\"It's not working,\" said Ed Hyman, chairman of Evercore ISI. \"So far, the economy is doing fine,\" though he added that a recession could be just a little late in arriving this time.Earning its reputationThere is a reason yield-curve inversions precede recessions.Yields on Treasurys largely reflect investors' expectations for what short-term interest rates set by the Federal Reserve will average over the life of a bond. When longer-term yields fall below short-term yields, it is a sign that investors expect the Fed to cut interest rates -- something it often does to jump-start a faltering economy.The near-mythical status of the inverted yield curve as a harbinger of downturns took time to develop. One of the first to put a spotlight on the link between inverted curves and recessions was Campbell Harvey, now a finance professor at Duke University, who published a dissertation on the subject in 1986.Inverted yield curves were discussed on Wall Street and at the Fed in the 1990s but remained a relatively niche subject until after the 2008 financial crisis, Harvey said. Then people started taking stock of warning signs they had initially played down.Data from Factiva supports that narrative, showing a huge increase in the number of news articles mentioning the yield curve when it inverted in 2019 compared with previous inversions.Reasons for doubtStill, there have always been limitations to the yield curve as a forecasting tool.An inverted curve indicates that investors expect rate cuts, but it doesn't explain why they are making those wagers.Bets on cuts could reflect some chance of a recession but also some probability of a benign scenario, with the Fed trimming rates as a precautionary measure even as growth remains stable.Inversions have reflected differing circumstances over the years. In the early 1980s, the Fed was hardly trying to avoid a recession when it raised rates to nearly 20% to fight double-digit inflation.In other cases, some economists believe that a recession could have been avoided had it not been for external shocks, such as the surge in oil prices when Iraq invaded Kuwait in 1990 or the Covid-19 pandemic in 2020.In the current situation, a recession has at times seemed likely. Forecasts for a downturn surged in 2022 as inflation kept climbing and the Fed started raising rates aggressively.Still, some economists remained confident that a recession could be avoided. Inflation, they argued, could fall at least part of the way to the Fed's 2% target on its own as businesses recovered from the pandemic and were able to boost output to meet customer demand again . Interest-rate increases were still needed but could be reversed before the economy slowed too much.Since then, inflation has fallen sharply with only a small uptick in the unemployment rate. The prospect of rate cuts without a recession has cheered investors, helping lift the S&P 500 24% last year and a further 11% this year.Harvey, the economist perhaps most associated with the inverted yield curve, has himself argued that the economy could avoid a recession this time.\"It is naive to think that you can just forecast the complex U.S. economy with a single measure from the bond market,\" he said.Pushing boundariesThere is no one definition of an inverted curve.Investors on Wall Street tend to focus on the 2-year Treasury note and the 10-year note because those bonds get traded often. Some economists prefer to measure the 10-year yield against the 3-month or 1-year yield.There is also the question of when to start a recession watch: Should it be when a part of the yield curve inverts for a day, or for longer than that?By several measures, the current wait for a downturn is already pushing up against, or surpassing, any in recent history.Since 1968, it has taken from nine to 24 months for a recession to materialize after the start of an inversion in which the 10-year yield fell below the 1-year yield for at least one month.By that definition, the latest inversion is about to end its 23rd month. Yet from the start of the inversion through April, the economy has added far more jobs than any comparable period that followed an inversion.Growing acceptanceThere is little indication that the inversion will end soon.Inversions have often ended shortly before recessions when rate cuts from the Fed came closer into view, leading to a big decline in short-term Treasury yields.A few recent economic reports haven't been as strong as expected. But it will take a lot more for investors to seriously bet on the yield curve un-inverting, given how poorly that wager has worked out over the past year-and-a-half, said Michael Lorizio, senior fixed-income trader at Manulife Investment Management.\"The curve inversion, especially earlier on in the cycle, played a major role in the psyche for investors,\" he said. \"But I do think now this has become kind of the new normal.\"","news_type":1},"isVote":1,"tweetType":1,"viewCount":211,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":205353581166768,"gmtCreate":1691144518033,"gmtModify":1691144827335,"author":{"id":"4114491699559462","authorId":"4114491699559462","name":"Dragon Horse","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":5,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"4114491699559462","idStr":"4114491699559462"},"themes":[],"htmlText":"v,","listText":"v,","text":"v,","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/205353581166768","repostId":"2356453176","repostType":2,"repost":{"id":"2356453176","pubTimestamp":1691143037,"share":"https://ttm.financial/m/news/2356453176?lang=&edition=fundamental","pubTime":"2023-08-04 17:57","market":"us","language":"en","title":"ESPN Used to Be Disney’s Cash Cow. Now, Its Revenue Is Declining, and Bob Iger Is Looking to Sell a Stake","url":"https://stock-news.laohu8.com/highlight/detail?id=2356453176","media":"Fortune","summary":"The Mouse House isn’t sure what to do with its languishing cash cow, ESPN.The sports network, once a financial engine for Disney, is suffering a decline in revenue owing to the slow death of traditional cable TV. Though ESPN is still profitable, Disney is looking to sell off a stake and transform the business into a digital streaming company, though near-term plans for that are unclear.ESPN has long been the reliable moneymaker of the media and entertainment giant. In the first half of 2023, Disney’s cable networks division, led by ESPN and its sister channels, generated $14 billion in revenue and $3 billion in profit. But revenue for those six months is down 6% from what it was a year earlier, and profit dropped 29%, according to the New York Times. Disney does not break out ESPN’s finances separately.In terms of advertising, ESPN has earned over $2 bi","content":"<html><head></head><body><p>The Mouse House isn’t sure what to do with its languishing cash cow, ESPN.</p><p>The sports network, once a financial engine for Disney, is suffering a decline in revenue owing to the slow death of traditional cable TV. Though ESPN is still profitable, Disney is looking to sell off a stake and transform the business into a digital streaming company, though near-term plans for that are unclear. </p><p>Disney CEO Bob Iger told CNBC in July that he wants “strategic partners that could either help us with distribution or content.” </p><p>ESPN has long been the reliable moneymaker of the media and entertainment giant. In the first half of 2023, Disney’s cable networks division, led by ESPN and its sister channels, generated $14 billion in revenue and $3 billion in profit. But revenue for those six months is down 6% from what it was a year earlier, and profit dropped 29%, according to the <em>New York Times. </em>Disney does not break out ESPN’s finances separately. </p><p>Since Disney acquired it in 1996, ESPN’s revenue—which largely comes from cable fees and advertisements—has played a major role in Disney’s growth, helping pay for the acquisitions of Marvel, Lucasfilm, Pixar, and 21st Century Fox, along with building its streaming service, Disney+.</p><p>Iger recently enlisted the help of former high-ranking Disney execs Tom Staggs and Kevin Mayer. Both Staggs and Mayer were considered candidates for the chief executive position in 2020, until Bob Chapek was hired and then quickly fired, with Iger returning as a “boomerang CEO” in November 2022.</p><p>Mayer and Staggs’ return was originally reported by Puck, saying they will consult with Iger and ESPN president Jimmy Pitaro on the future of the sports network, and, to a lesser degree, Disney’s other TV networks like ABC.</p><p>Pitaro said the company had seen “a healthy level of interest” from sports leagues as well as technology, marketing, and distribution companies for buying a stake in the business. </p><p>Disney did not immediately respond to <em>Fortune’</em>s<em> </em>request for comment.</p><h2 id=\"id_3751436407\">Death of a (cable) salesman</h2><p>Cable subscribers are an endangered species. </p><p>Since streaming platforms started their rise in the mid-2000s, cable television has been on the decline. In the first quarter of 2023, cable and live TV providers lost 2.31 million subscribers, Cord Cutters News reported.</p><p>Streaming platforms offer cheaper subscription options and let viewers watch what they want, when they want from their massive libraries of shows and movies. The average cable bill is over $200 a month, according to <em>U.S. News &amp; World Report.</em> In comparison, the standard Netflix subscription plan is $15.49 a month.</p><p>ESPN’s two main revenue streams rely on cable: affiliate fees from cable providers and ads. Affiliate fees are monthly fees paid by cable providers for the right to offer ESPN channels to households. ESPN collected around $626 million in affiliate fees in 2022, according to the <em>New York Times</em>, citing S&amp;P Global Market Intelligence<em>.</em></p><p>In terms of advertising, ESPN has earned over $2 billion annually in recent years, the <em>New York Times </em>reported.</p><p>Iger told CNBC that ESPN will transition to a streaming service model, but declined to share the time frame. However, in later reporting, sources told CNBC that a new direct-to-consumer product won’t be ready to launch before 2025.<br/> </p></body></html>","source":"yahoofinance_sg","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>ESPN Used to Be Disney’s Cash Cow. Now, Its Revenue Is Declining, and Bob Iger Is Looking to Sell a Stake</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nESPN Used to Be Disney’s Cash Cow. Now, Its Revenue Is Declining, and Bob Iger Is Looking to Sell a Stake\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-08-04 17:57 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/espn-used-disney-cash-cow-190702041.html><strong>Fortune</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The Mouse House isn’t sure what to do with its languishing cash cow, ESPN.The sports network, once a financial engine for Disney, is suffering a decline in revenue owing to the slow death of ...</p>\n\n<a href=\"https://finance.yahoo.com/news/espn-used-disney-cash-cow-190702041.html\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"DIS":"迪士尼"},"source_url":"https://finance.yahoo.com/news/espn-used-disney-cash-cow-190702041.html","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2356453176","content_text":"The Mouse House isn’t sure what to do with its languishing cash cow, ESPN.The sports network, once a financial engine for Disney, is suffering a decline in revenue owing to the slow death of traditional cable TV. Though ESPN is still profitable, Disney is looking to sell off a stake and transform the business into a digital streaming company, though near-term plans for that are unclear. Disney CEO Bob Iger told CNBC in July that he wants “strategic partners that could either help us with distribution or content.” ESPN has long been the reliable moneymaker of the media and entertainment giant. In the first half of 2023, Disney’s cable networks division, led by ESPN and its sister channels, generated $14 billion in revenue and $3 billion in profit. But revenue for those six months is down 6% from what it was a year earlier, and profit dropped 29%, according to the New York Times. Disney does not break out ESPN’s finances separately. Since Disney acquired it in 1996, ESPN’s revenue—which largely comes from cable fees and advertisements—has played a major role in Disney’s growth, helping pay for the acquisitions of Marvel, Lucasfilm, Pixar, and 21st Century Fox, along with building its streaming service, Disney+.Iger recently enlisted the help of former high-ranking Disney execs Tom Staggs and Kevin Mayer. Both Staggs and Mayer were considered candidates for the chief executive position in 2020, until Bob Chapek was hired and then quickly fired, with Iger returning as a “boomerang CEO” in November 2022.Mayer and Staggs’ return was originally reported by Puck, saying they will consult with Iger and ESPN president Jimmy Pitaro on the future of the sports network, and, to a lesser degree, Disney’s other TV networks like ABC.Pitaro said the company had seen “a healthy level of interest” from sports leagues as well as technology, marketing, and distribution companies for buying a stake in the business. Disney did not immediately respond to Fortune’s request for comment.Death of a (cable) salesmanCable subscribers are an endangered species. Since streaming platforms started their rise in the mid-2000s, cable television has been on the decline. In the first quarter of 2023, cable and live TV providers lost 2.31 million subscribers, Cord Cutters News reported.Streaming platforms offer cheaper subscription options and let viewers watch what they want, when they want from their massive libraries of shows and movies. The average cable bill is over $200 a month, according to U.S. News & World Report. In comparison, the standard Netflix subscription plan is $15.49 a month.ESPN’s two main revenue streams rely on cable: affiliate fees from cable providers and ads. Affiliate fees are monthly fees paid by cable providers for the right to offer ESPN channels to households. ESPN collected around $626 million in affiliate fees in 2022, according to the New York Times, citing S&P Global Market Intelligence.In terms of advertising, ESPN has earned over $2 billion annually in recent years, the New York Times reported.Iger told CNBC that ESPN will transition to a streaming service model, but declined to share the time frame. However, in later reporting, sources told CNBC that a new direct-to-consumer product won’t be ready to launch before 2025.","news_type":1},"isVote":1,"tweetType":1,"viewCount":85,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":311124543529056,"gmtCreate":1716963665646,"gmtModify":1716966206496,"author":{"id":"4114491699559462","authorId":"4114491699559462","name":"Dragon Horse","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":5,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4114491699559462","authorIdStr":"4114491699559462"},"themes":[],"htmlText":"Share your opinion about this news…","listText":"Share your opinion about this news…","text":"Share your opinion about this news…","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/311124543529056","repostId":"2438400023","repostType":4,"repost":{"id":"2438400023","weMediaInfo":{"introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"media_name":"Dow Jones","id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1716950622,"share":"https://ttm.financial/m/news/2438400023?lang=&edition=fundamental","pubTime":"2024-05-29 10:43","market":"hk","language":"en","title":"Wall Street's Favorite Recession Indicator Is in a Slump of Its Own","url":"https://stock-news.laohu8.com/highlight/detail?id=2438400023","media":"Dow Jones","summary":"One of Wall Street's favorite recession indicators looks broken.An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven't been any glaring false alarms.Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.Bets on cuts could reflect some chance of a recession but also some probability of a benign","content":"<html><head></head><body><p>One of Wall Street&#39;s favorite recession indicators looks broken.</p><p>An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven&#39;t been any glaring false alarms.</p><p>Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.</p><p>If a recession doesn&#39;t materialize soon, it could do lasting damage to the yield curve&#39;s status as a warning system, providing one of the most significant examples of how the fallout from the Covid-19 pandemic has upended longstanding assumptions on Wall Street about how markets and the economy function. Even if the past couple of years have been unusual, investors likely wouldn&#39;t be as worried when another inversion occurs in the future.</p><p>&#34;It&#39;s not working,&#34; said Ed Hyman, chairman of <a href=\"https://laohu8.com/S/EVR\">Evercore</a> ISI. &#34;So far, the economy is doing fine,&#34; though he added that a recession could be just a little late in arriving this time.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/786e45d1c2d03b2df9d3c24d9de727b0\" tg-width=\"722\" tg-height=\"424\"/></p><p><strong>Earning its reputation</strong></p><p>There is a reason yield-curve inversions precede recessions.</p><p>Yields on Treasurys largely reflect investors&#39; expectations for what short-term interest rates set by the Federal Reserve will average over the life of a bond. When longer-term yields fall below short-term yields, it is a sign that investors expect the Fed to cut interest rates -- something it often does to jump-start a faltering economy.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/96ada24e2940cb3f71bedfa62a54cd0a\" tg-width=\"740\" tg-height=\"810\"/></p><p>The near-mythical status of the inverted yield curve as a harbinger of downturns took time to develop. One of the first to put a spotlight on the link between inverted curves and recessions was Campbell Harvey, now a finance professor at Duke University, who published a dissertation on the subject in 1986.</p><p>Inverted yield curves were discussed on Wall Street and at the Fed in the 1990s but remained a relatively niche subject until after the 2008 financial crisis, Harvey said. Then people started taking stock of warning signs they had initially played down.</p><p>Data from Factiva supports that narrative, showing a huge increase in the number of news articles mentioning the yield curve when it inverted in 2019 compared with previous inversions.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7709be57bb0250200ec923eec019ab26\" tg-width=\"741\" tg-height=\"418\"/></p><p><strong>Reasons for doubt</strong></p><p>Still, there have always been limitations to the yield curve as a forecasting tool.</p><p>An inverted curve indicates that investors expect rate cuts, but it doesn&#39;t explain why they are making those wagers.</p><p>Bets on cuts could reflect some chance of a recession but also some probability of a benign scenario, with the Fed trimming rates as a precautionary measure even as growth remains stable.</p><p>Inversions have reflected differing circumstances over the years. In the early 1980s, the Fed was hardly trying to avoid a recession when it raised rates to nearly 20% to fight double-digit inflation.</p><p>In other cases, some economists believe that a recession could have been avoided had it not been for external shocks, such as the surge in oil prices when Iraq invaded Kuwait in 1990 or the Covid-19 pandemic in 2020.</p><p>In the current situation, a recession has at times seemed likely. Forecasts for a downturn surged in 2022 as inflation kept climbing and the Fed started raising rates aggressively.</p><p>Still, some economists remained confident that a recession could be avoided. Inflation, they argued, could fall at least part of the way to the Fed&#39;s 2% target on its own as businesses recovered from the pandemic and were able to boost output to meet customer demand again . Interest-rate increases were still needed but could be reversed before the economy slowed too much.</p><p>Since then, inflation has fallen sharply with only a small uptick in the unemployment rate. The prospect of rate cuts without a recession has cheered investors, helping lift the S&amp;P 500 24% last year and a further 11% this year.</p><p>Harvey, the economist perhaps most associated with the inverted yield curve, has himself argued that the economy could avoid a recession this time.</p><p>&#34;It is naive to think that you can just forecast the complex U.S. economy with a single measure from the bond market,&#34; he said.</p><p><strong>Pushing boundaries</strong></p><p>There is no one definition of an inverted curve.</p><p>Investors on Wall Street tend to focus on the 2-year Treasury note and the 10-year note because those bonds get traded often. Some economists prefer to measure the 10-year yield against the 3-month or 1-year yield.</p><p>There is also the question of when to start a recession watch: Should it be when a part of the yield curve inverts for a day, or for longer than that?</p><p>By several measures, the current wait for a downturn is already pushing up against, or surpassing, any in recent history.</p><p>Since 1968, it has taken from nine to 24 months for a recession to materialize after the start of an inversion in which the 10-year yield fell below the 1-year yield for at least one month.</p><p>By that definition, the latest inversion is about to end its 23rd month. Yet from the start of the inversion through April, the economy has added far more jobs than any comparable period that followed an inversion.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/777500f465c0ed0947d9eb6b6a386952\" tg-width=\"736\" tg-height=\"479\"/></p><p><strong>Growing acceptance</strong></p><p>There is little indication that the inversion will end soon.</p><p>Inversions have often ended shortly before recessions when rate cuts from the Fed came closer into view, leading to a big decline in short-term Treasury yields.</p><p>A few recent economic reports haven&#39;t been as strong as expected. But it will take a lot more for investors to seriously bet on the yield curve un-inverting, given how poorly that wager has worked out over the past year-and-a-half, said Michael Lorizio, senior fixed-income trader at Manulife Investment Management.</p><p>&#34;The curve inversion, especially earlier on in the cycle, played a major role in the psyche for investors,&#34; he said. &#34;But I do think now this has become kind of the new normal.&#34;</p><p></p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Wall Street's Favorite Recession Indicator Is in a Slump of Its Own</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWall Street's Favorite Recession Indicator Is in a Slump of Its Own\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2024-05-29 10:43</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p>One of Wall Street&#39;s favorite recession indicators looks broken.</p><p>An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven&#39;t been any glaring false alarms.</p><p>Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.</p><p>If a recession doesn&#39;t materialize soon, it could do lasting damage to the yield curve&#39;s status as a warning system, providing one of the most significant examples of how the fallout from the Covid-19 pandemic has upended longstanding assumptions on Wall Street about how markets and the economy function. Even if the past couple of years have been unusual, investors likely wouldn&#39;t be as worried when another inversion occurs in the future.</p><p>&#34;It&#39;s not working,&#34; said Ed Hyman, chairman of <a href=\"https://laohu8.com/S/EVR\">Evercore</a> ISI. &#34;So far, the economy is doing fine,&#34; though he added that a recession could be just a little late in arriving this time.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/786e45d1c2d03b2df9d3c24d9de727b0\" tg-width=\"722\" tg-height=\"424\"/></p><p><strong>Earning its reputation</strong></p><p>There is a reason yield-curve inversions precede recessions.</p><p>Yields on Treasurys largely reflect investors&#39; expectations for what short-term interest rates set by the Federal Reserve will average over the life of a bond. When longer-term yields fall below short-term yields, it is a sign that investors expect the Fed to cut interest rates -- something it often does to jump-start a faltering economy.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/96ada24e2940cb3f71bedfa62a54cd0a\" tg-width=\"740\" tg-height=\"810\"/></p><p>The near-mythical status of the inverted yield curve as a harbinger of downturns took time to develop. One of the first to put a spotlight on the link between inverted curves and recessions was Campbell Harvey, now a finance professor at Duke University, who published a dissertation on the subject in 1986.</p><p>Inverted yield curves were discussed on Wall Street and at the Fed in the 1990s but remained a relatively niche subject until after the 2008 financial crisis, Harvey said. Then people started taking stock of warning signs they had initially played down.</p><p>Data from Factiva supports that narrative, showing a huge increase in the number of news articles mentioning the yield curve when it inverted in 2019 compared with previous inversions.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7709be57bb0250200ec923eec019ab26\" tg-width=\"741\" tg-height=\"418\"/></p><p><strong>Reasons for doubt</strong></p><p>Still, there have always been limitations to the yield curve as a forecasting tool.</p><p>An inverted curve indicates that investors expect rate cuts, but it doesn&#39;t explain why they are making those wagers.</p><p>Bets on cuts could reflect some chance of a recession but also some probability of a benign scenario, with the Fed trimming rates as a precautionary measure even as growth remains stable.</p><p>Inversions have reflected differing circumstances over the years. In the early 1980s, the Fed was hardly trying to avoid a recession when it raised rates to nearly 20% to fight double-digit inflation.</p><p>In other cases, some economists believe that a recession could have been avoided had it not been for external shocks, such as the surge in oil prices when Iraq invaded Kuwait in 1990 or the Covid-19 pandemic in 2020.</p><p>In the current situation, a recession has at times seemed likely. Forecasts for a downturn surged in 2022 as inflation kept climbing and the Fed started raising rates aggressively.</p><p>Still, some economists remained confident that a recession could be avoided. Inflation, they argued, could fall at least part of the way to the Fed&#39;s 2% target on its own as businesses recovered from the pandemic and were able to boost output to meet customer demand again . Interest-rate increases were still needed but could be reversed before the economy slowed too much.</p><p>Since then, inflation has fallen sharply with only a small uptick in the unemployment rate. The prospect of rate cuts without a recession has cheered investors, helping lift the S&amp;P 500 24% last year and a further 11% this year.</p><p>Harvey, the economist perhaps most associated with the inverted yield curve, has himself argued that the economy could avoid a recession this time.</p><p>&#34;It is naive to think that you can just forecast the complex U.S. economy with a single measure from the bond market,&#34; he said.</p><p><strong>Pushing boundaries</strong></p><p>There is no one definition of an inverted curve.</p><p>Investors on Wall Street tend to focus on the 2-year Treasury note and the 10-year note because those bonds get traded often. Some economists prefer to measure the 10-year yield against the 3-month or 1-year yield.</p><p>There is also the question of when to start a recession watch: Should it be when a part of the yield curve inverts for a day, or for longer than that?</p><p>By several measures, the current wait for a downturn is already pushing up against, or surpassing, any in recent history.</p><p>Since 1968, it has taken from nine to 24 months for a recession to materialize after the start of an inversion in which the 10-year yield fell below the 1-year yield for at least one month.</p><p>By that definition, the latest inversion is about to end its 23rd month. Yet from the start of the inversion through April, the economy has added far more jobs than any comparable period that followed an inversion.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/777500f465c0ed0947d9eb6b6a386952\" tg-width=\"736\" tg-height=\"479\"/></p><p><strong>Growing acceptance</strong></p><p>There is little indication that the inversion will end soon.</p><p>Inversions have often ended shortly before recessions when rate cuts from the Fed came closer into view, leading to a big decline in short-term Treasury yields.</p><p>A few recent economic reports haven&#39;t been as strong as expected. But it will take a lot more for investors to seriously bet on the yield curve un-inverting, given how poorly that wager has worked out over the past year-and-a-half, said Michael Lorizio, senior fixed-income trader at Manulife Investment Management.</p><p>&#34;The curve inversion, especially earlier on in the cycle, played a major role in the psyche for investors,&#34; he said. &#34;But I do think now this has become kind of the new normal.&#34;</p><p></p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2438400023","content_text":"One of Wall Street's favorite recession indicators looks broken.An anomaly known as an inverted yield curve, in which yields on short-term Treasurys exceed those of longer-term government debt, has long been taken as a nearly surefire signal that an economic pullback looms. In each of the previous eight U.S. downturns, that has happened before the economy sputtered. There haven't been any glaring false alarms.Now, though, that streak is threatened. The yield curve has been inverted for a record stretch -- around 400 trading sessions or more by some measures -- with no signs of a major slowdown. U.S. employers added a solid 175,000 jobs last month, and economic growth this quarter is expected to pick up from earlier in the year.If a recession doesn't materialize soon, it could do lasting damage to the yield curve's status as a warning system, providing one of the most significant examples of how the fallout from the Covid-19 pandemic has upended longstanding assumptions on Wall Street about how markets and the economy function. Even if the past couple of years have been unusual, investors likely wouldn't be as worried when another inversion occurs in the future.\"It's not working,\" said Ed Hyman, chairman of Evercore ISI. \"So far, the economy is doing fine,\" though he added that a recession could be just a little late in arriving this time.Earning its reputationThere is a reason yield-curve inversions precede recessions.Yields on Treasurys largely reflect investors' expectations for what short-term interest rates set by the Federal Reserve will average over the life of a bond. When longer-term yields fall below short-term yields, it is a sign that investors expect the Fed to cut interest rates -- something it often does to jump-start a faltering economy.The near-mythical status of the inverted yield curve as a harbinger of downturns took time to develop. One of the first to put a spotlight on the link between inverted curves and recessions was Campbell Harvey, now a finance professor at Duke University, who published a dissertation on the subject in 1986.Inverted yield curves were discussed on Wall Street and at the Fed in the 1990s but remained a relatively niche subject until after the 2008 financial crisis, Harvey said. Then people started taking stock of warning signs they had initially played down.Data from Factiva supports that narrative, showing a huge increase in the number of news articles mentioning the yield curve when it inverted in 2019 compared with previous inversions.Reasons for doubtStill, there have always been limitations to the yield curve as a forecasting tool.An inverted curve indicates that investors expect rate cuts, but it doesn't explain why they are making those wagers.Bets on cuts could reflect some chance of a recession but also some probability of a benign scenario, with the Fed trimming rates as a precautionary measure even as growth remains stable.Inversions have reflected differing circumstances over the years. In the early 1980s, the Fed was hardly trying to avoid a recession when it raised rates to nearly 20% to fight double-digit inflation.In other cases, some economists believe that a recession could have been avoided had it not been for external shocks, such as the surge in oil prices when Iraq invaded Kuwait in 1990 or the Covid-19 pandemic in 2020.In the current situation, a recession has at times seemed likely. Forecasts for a downturn surged in 2022 as inflation kept climbing and the Fed started raising rates aggressively.Still, some economists remained confident that a recession could be avoided. Inflation, they argued, could fall at least part of the way to the Fed's 2% target on its own as businesses recovered from the pandemic and were able to boost output to meet customer demand again . Interest-rate increases were still needed but could be reversed before the economy slowed too much.Since then, inflation has fallen sharply with only a small uptick in the unemployment rate. The prospect of rate cuts without a recession has cheered investors, helping lift the S&P 500 24% last year and a further 11% this year.Harvey, the economist perhaps most associated with the inverted yield curve, has himself argued that the economy could avoid a recession this time.\"It is naive to think that you can just forecast the complex U.S. economy with a single measure from the bond market,\" he said.Pushing boundariesThere is no one definition of an inverted curve.Investors on Wall Street tend to focus on the 2-year Treasury note and the 10-year note because those bonds get traded often. Some economists prefer to measure the 10-year yield against the 3-month or 1-year yield.There is also the question of when to start a recession watch: Should it be when a part of the yield curve inverts for a day, or for longer than that?By several measures, the current wait for a downturn is already pushing up against, or surpassing, any in recent history.Since 1968, it has taken from nine to 24 months for a recession to materialize after the start of an inversion in which the 10-year yield fell below the 1-year yield for at least one month.By that definition, the latest inversion is about to end its 23rd month. Yet from the start of the inversion through April, the economy has added far more jobs than any comparable period that followed an inversion.Growing acceptanceThere is little indication that the inversion will end soon.Inversions have often ended shortly before recessions when rate cuts from the Fed came closer into view, leading to a big decline in short-term Treasury yields.A few recent economic reports haven't been as strong as expected. But it will take a lot more for investors to seriously bet on the yield curve un-inverting, given how poorly that wager has worked out over the past year-and-a-half, said Michael Lorizio, senior fixed-income trader at Manulife Investment Management.\"The curve inversion, especially earlier on in the cycle, played a major role in the psyche for investors,\" he said. \"But I do think now this has become kind of the new normal.\"","news_type":1},"isVote":1,"tweetType":1,"viewCount":211,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":205353581166768,"gmtCreate":1691144518033,"gmtModify":1691144827335,"author":{"id":"4114491699559462","authorId":"4114491699559462","name":"Dragon Horse","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":5,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4114491699559462","authorIdStr":"4114491699559462"},"themes":[],"htmlText":"v,","listText":"v,","text":"v,","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/205353581166768","repostId":"2356453176","repostType":2,"isVote":1,"tweetType":1,"viewCount":85,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}