Every few months, the media will come up with something new to scare the retail investors with, and of course, it's been Covid-19 for the last 2 years. Now recently their scare tactics involve rising inflation and rising interest rates, but sure enough, the market actually went up instead.The media will always find something new to scare investors with. So what's new? What are they trying to put on people's minds right now? "The Treasury Yield Curve has started inverting" [OMG] What's currently happening is that the 2-year Treasury yield has gone above the 10-year Treasury yield, creating what's known as a Yield Curve Inversion. What the media tells you is that it's the greatest predictor of a recession.How true is this?Does this signal an imminent recession and a
The inverted yield curve has not been useful for predicting bear markets in a timely fashion in the past 40 years. Here's the data.
The yield curve has inverted in U.S Treasury bond markets in Apr2022. This is big news in financial media. Why is this a significant event? According to experts, the inverted yield curve is one of the best predictors of impending economic recession. However, is it a good predictor of an equity bear market?As an investor, the question that interests me "Is the inverted yield curve a good predictor for an impending equity bear market in a timely fashion?" The keyword here is timely. Being early in financial markets is as good as being wrong even if the prediction turns out to be right eventually. It is useless in making predictions about bear markets, selling out early, only to see the market rise another 30% before the bear market finally sets in.Based on the number of news a
Worries about interest rate will die after Fed announcement?
In this article 2 topics will be analysed they are:A. Worries about soaring interest rates on US TreasuriesB. Flattening the yield curve of US debtUnder normal circumstances, interest rates on long-end bonds should be higher than those on short-end bonds, just like savings, long-term deposit rates are naturally higher than short-term ones, because the former has greater liquidity risk. But as expectations of Fed interest rate hikes rise, the yield curve flattens quickly. After the Fed raised interest rates, the 10-year and 5-year yields were inverted, and the 10-year and 2-year yields have narrowed to within 20BP.Historically, the reversal of the US bond yield curve usually occurred in the second half of the Fed's rate hike or after the end of the rate hike cycle, but this time i
When the yield curve starts to invert , it can signify a recession coming. However it takes about 9 months to 2 years before any recession happens.Because of covid, war and inflation, it's a unique situation which can cause the yield curve to invert. Meanwhile I am still positive that there's still room for stocks to run. Cautious optimism I would say.
Historically, yield curve inversion signifies that a recession may be incoming (only 2 false warnings thus far). If this turns out to be the case, would be good for picking up more stocks!
In 2022, U.S. stocks, commodities, precious metals, Bitcoin and other investment varieties marked by the U.S. dollar all encountered the policy shift impact of the Federal Reserve, which was huge, comprehensive and of turning significance. All kinds of elites in the United States are so smart and keen. All kinds of data are like mountains, various analyses, trend charts, and K lines are also the largest in the world. If you walk in these data all day long, it is not as fast as production. U.S. stocks are the stock of the world and the investment target of the world. They are not the stocks of the United States, nor are they the investment targets of the United States.Since the epidemic began the year before last, many people have been clamouring that the plot of 1929 should be repeated and
$JPMorgan Chase(JPM)$$Bank of America(BAC)$banking stocks fell. I was wondering why. Heres the root cause - yeild curve inversion. The complex problem is getting more complex. First, recovery from pandemic kicked off higher job rate then inflation, fed rate hike, war, more jobs, more inflation, fed planning to double up the rate hike, still more inflation and suddenly this yield curve inversion which is early sign of recession.Fed rate hike supposed to rally banking stocks now are in doldrums due to talk of recession. Mega melodrama intensifies. Crazy year indeed. Just be careful.
Typically.. the market will continue to move upfor a while before it comes down.. how far up and how far down noone will know until it has happen... so no point speculating.. but the laws of nature always applies.. what goes up must come down and what goes down will eventually go up.. The question is.. do you want to let time work for you.. or do you prefer to time the market?
Peace negotiation broke down again. Why am i not surprise with the farce?Pudding gonna choke the market with mutual disruption via high resources prices.. As long as the head is still the same.. Nothing will change until he get his goal or die trying.Thus, more russian bear will strike the market especially when russian & ukraine provide substaintial amt of fuel, grains & food oil, precious metal for battery and semichip. Time to slowly load up quality stocks while the mad man give us the opportunity to shopping spreeOh and us fed's promised interest hike adjustment soon to follow... What a lovely bear & eagle onslaught
Quite honestly, I do not paid much attention to inverted yield curve. Well, it might implied recession is coming (base on historical patterns) ... or maybe not, who knows. Does it really matter? Well it depends on whether you are an investor or a trader. If you are an investor like Warren Buffett who invest for the long haul, you are likely to stay vested through the boom and the bust. Inverted yield curve (or not) should not matter because you follow your game plan by adding shares at a price level you are comfortable owning it.If you are a trader like Ray Dalio, Carl Icahn or George Soros etc, you are more likely to stay in and out by timing the market ... buy low sell high on every piece of news by squeezing the max profit out of each trade.There's no right or w
I am not too concerned or worried. There is a potential game plan for every kind of market. If share prices drop, good opportunity for me to pick up good stocks at good prices. Most importantly is investment horizon. If sufficiently long and investing in a good company whose fundamentals are unchanged by the macro factors, this presents as a good opportunity to pick up good stocks. Do as advised by Warren Buffett, to be greedy when others are fearful. For investors, it'snot about timing the market but time in the market! At the same time, you can be like Warren Buffett, to buy good companies at good valuations and to hold them for a long period! Putting good many of his wise advice in one shot!By the way, I am still waiting for apple.... to drop
Bull/Bear/Divergence? 9 Institutions Views on The Inverted Yield Curve?
On March 29, Eastern Time, the U.S. 2/10-year Treasury yield curve inverted for the first time since August 2019. The yield on the benchmark 10-year U.S. Treasury bond broke 2.4% in midday trading, while the 2-year yield approached 2.4%, exceeding the 10-year yield, and the spread narrowed to -0.234 basis points at one point. But then, the yield curve quickly bounced back, with no further inversion. What’s the relationship between inverted yield curves and recessions? When short-term bond yields are higher than long-term bonds, it's called an "inverted curve." An inverted yield curve is a typical signal that a recession is coming. According to institutional statistics, since 1970, there have been 7 inversions, all of which were at the end of the Fed’s interest rate hike. Among them, s
The yield curve has inverted briefly a while back.. 1) Does this signify that the market will be heading into a recession soon? Entirely possible.. 2) Could this be a false alarm? Also possible.. 3) Will It be possible to wait for the market to crash before entering? Sure.. you can try.. 4) Will it be possible to catch the bottom and enter before the market goes up again?Statistically, it has been shown that it is highlyunlikely to happen.. If the market is falling.. would you buy? If the market rises again.. would you buy? What if it falls more later? 5) So.. what is next? Stay invested.. pick the right companies.. i.e companies that you think willstill be around and growing 10 years later.. those companies will be good pick
Inverted Yield Curve looks to be forming ... ... what should we do?
There is much talk about yield curve inversions and their correlation with recessions.the news painted a mixed response to the inverted yield curve Yield curve extracted from ReutersFrom Investopedia: An inverted yield curve describes the unusual drop of yields on longer-term debt below yields on the short-term debt of the same credit quality. Sometimes referred to as a negative yield curve, the inverted curve has proven in the past to be a relatively reliable lead indicator of a recession. The yield curve can be expressed using a percentage of the 2-year and 10-year treasury yield rates or the net difference between the 2 year and 10 years treasure rates.From marketwatch.com - note that a recession usually follows the inversionAn inversion in these particular point