Money Pulse Bulletin – Looming Inverted Yield Curve?

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October 11, 2018
Money Pulse Bulletin – Looming Inverted Yield Curve?

Image Copyright Ted Grussing Photography – Used with permission

We love this!

A week ago we heard fear mongering again over the ominous looming INVERTED YIELD CURVE. You know, that’s when the Fed starts raising interest rates for short term lending and the longer term yield fails to rise together. And that, in turn, means the economy is certainly going to crash as short term rates eventually overtake long term rates spelling DOOM.

One of yesterday morning’s headlines read, “broad market indexes move rapidly lower as EVERYONE is worried – about something.” Turns out by day’s end with the Dow losing 830 points (over 3%), the thing everyone is worried about was that the stubborn Long Term Treasury Yield managed to peak above 3.25%!

So…let’s get this straight.

  • The economy is in better shape than it has been in decades
  • Employment is expanding rapidly across all sectors
  • Manufacturing is growing a new base to the US economy
  • Inflation is returning-but not threatening
  • Leading Economic Indicators remain positive
  • The jobs participation rate is moving up for the first time since the Great Recession …and now signs that there will, in fact, be no INVERTED YIELD CURVE and this has the stock market and investors worried? This is it?! We call that ridiculous.

What we have here is a perfectly predictable ‘correction’ in the works, if even that. This is a great buying opportunity. If this flicker lasts long enough, like a few weeks, millions of 401(k)’s will be able to buy the dip and be locked and loaded for an end of year rally.

So that’s your CMW Wealth stock market bulletin. Be of good cheer. The market is still here and it’s not going away anytime soon! Of course, we have to disclaim any certainty over these predictions. This is all a part of our humble opinion and we could be wrong; we have been before.

Indexes are listed in respective order to their reference above: DJ Industrial Average TR USD; BofAML US Treasuries 1-3 Yr TR USD. These materials have been prepared solely for informational purposes based upon data generally available to the public from sources believed to be reliable. All performance references are to benchmark indexes. Performance of specific funds will vary from respective benchmarks. Past performance is not an assurance of future results. Each index cited is provided to illustrate market trends for various asset classes. It is not possible to invest directly in an index.